Wells Fargo Announces Account Changes to Help Limit Overdraft Fees
Despite some changes over the years, overdraft fees continue to be an expensive plague on American consumers. However, little by little, institutions have been making some changes. The latest in this trend is Wells Fargo, which recently announced some upcoming adjustments to its policies.
The first change coming down the pike is that customers enrolled in Overdraft Protection service will no longer be assessed a fee when fund transfers are triggered by overdrafts and used to cover checking transactions. Next, Wells Fargo will be discontinuing its non-sufficient funds fees and will no longer charge customers for returned items. Both of these updates are expected to take effect by the end of the first quarter.
Looking further ahead, by the end of the third quarter, customers who receive payroll checks via direct deposit will be able to access their funds up to two days early. Also in Q3, the bank will introduce a 24-hour grace period for overdraft fees. In turn, customers will have one day’s time to bring their account back to positive before being assessed the fee. Once rolled out, this will replace Wells Fargo’s current Overdraft Rewind product, which waives overdraft fees if a covering direct deposit is received by the next morning.
Lastly, Wells Fargo says it will begin offering qualifying customers a short-term loan option of up to $500. These loans will be available for a flat-fee upfront and repaid through monthly installments. Details on what the fees will be were not released, but the product is expected to arrive by the end of the year.
Wells Fargo’s latest actions are similar to those taken by Chase last month. Changes at Chase included the introduction of a grace period, elimination of returned items fees, and the ability for payroll direct deposit customers to access funds early. Prior to that, online banks such as Ally, Capital One, and Discover have also overhauled their fee schedules in recent years, while FinTechs including Chime and several others have made the early payroll funds features a key part of their marketing.
In a statement regarding the upcoming changes, Wells Fargo’s CEO of Consumer and Small Business Banking Mary Mack said, “Core to Wells Fargo’s evolution is making sure we stay focused on our customers, first and foremost. The enhancements we’re announcing today add to changes we’ve made previously and give our customers more choice and flexibility in meeting their needs.”
Additionally, National Urban League President and member of Wells Fargo’s Banking Inclusion Initiative Task Force Marc H. Morial remarked, “The changes Wells Fargo is announcing are important steps in helping consumers manage their finances. The changes increase choices and flexibility, and as a result will bring more people into the mainstream banking system and away from higher-cost options outside of it.”
Once again, as was the case with Chase, the updates Wells Fargo is making to their policies are welcomed if not overdue. To that latter point, customers may be disappointed to learn that some of the more vital changes may not arrive for six months or more. Still, for those who haven’t already moved to online banks or other institutions with more customer-friendly features, hopefully these new policies will help them avoid costly fees and improve their finances overall.