Bank of America Corp. and J.P. Morgan Chase & Co. plan to loosen their overdraft policies amid an uproar among some lawmakers over the fees imposed by banks.
The changes include no fees at BofA if customers overdraw their account by less than $10 in one day, and no fees for J.P. Morgan customers if their account is overdrawn by $5 or less.
The moves, set to be announced on Wednesday, come as Senate Banking Committee Chairman Christopher Dodd (D., Conn.) prepares a bill that would likely require banks to get permission before enrolling customers in an overdraft program. Similar legislation was introduced in the House earlier this year.
"We are doing this because we have customers under stress, and we can help a lot of them right now," said Brian Moynihan, president of consumer and small-business banking at BofA, which is based in Charlotte, N.C.
While Moynihan said the changes, effective Oct. 19, aren't in response to political pressure, other U.S. banks could face scrutiny from lawmakers if they don't follow BofA's lead. Most banks automatically enroll consumers in their bank-overdraft programs. Those programs have become more controversial in recent months, as some banks boosted overdraft fees to record levels and more consumers incurred the fees by using debit cards.
A recent study by the Federal Deposit Insurance Corp. found that consumers are getting hit with fees ranging from $10 to $38 per item in these automatic overdraft programs.