Bank of America says it's getting rid of overdraft fees on debit-card purchases.
The move comes a few months before new federal rules will make it much harder for banks to charge the fees, which have become a big source of revenue.
In the current system, when a customer doesn't have enough money in his account to cover a debit-card purchase, the purchase goes through and the customer gets charged an overdraft fee of $35 or so. In the new system, purchases will be denied if the customer doesn't have enough money in his account.
Last fall, Bank of America started allowing customers to opt out of overdraft protection on their debit card — to voluntarily change the settings on their account, so purchases are denied if there's not enough money in the account.
But some people who wanted to change their account settings said B of A tried to talk them out of it. (B of A said it was just trying to explain the implications of opting out.) I wrote about this issue a couple weeks ago.
Under the new changes B of A is announcing, customers who want overdraft protection can choose to link their debit card to a savings account or credit card. The changes won't affect old-fashioned checks. And customers who try to overdraw their account at the ATM will be given a warning that they're about to overdraw their account.
Under new federal rules that will take effect this summer, banks won't be allowed to charge customers overdraft fees for debit-card purchases unless customers sign up for overdraft protection. For customers who don't sign up, debit card purchases that would overdraw the customer's account will be denied.
Citigroup already denies debit-card purchases that would overdraw the customer's account, USA Today notes. Other banks say they're still working on new policies.