UPDATE: June 14, 2022: Citizens Bank is eliminating savings overdraft protection fees by the end of this month and nonsufficient funds (NSF) fees by the end of the year, the bank said Monday in a press release.

The bank is also applying its Citizens Paid Early product to all personal checking, savings and money-market accounts, so customers who receive direct deposits into their Citizens accounts can receive their paycheck up to two days early, it said. That policy went into effect June 5.

“We continue to innovate, simplify our product set and help empower our customers to feel more confident with their finances,” said Brendan Coughlin, Citizens’ consumer-banking chief, said in Monday’s release. “Today's announcements demonstrate our ongoing commitment to serve as our customers trusted financial partner, as well as add value to their daily lives by enabling them to get paid even faster than their employer scheduled.”

The bank in October launched a feature reversing customers’ overdraft fees if they deposit or transfer enough funds to make their account balance positive by 10 p.m. Eastern time the next business day. It also introduced two overdraft fee-free account options in March.

Dive Brief:

• Frost Bank, one of the largest lenders in Texas, is eliminating non-sufficient funds (NSF) fees and expanding its overdraft grace program, the bank said in a press release Monday.
• All customers with a personal checking account can overdraw by $100 or less without incurring a fee — not just those that meet a monthly minimum direct deposit requirement, the bank said.
• The updates will cost the Frost Bank up to $3.5 million in forgone fee revenue per year, the bank said. 

Dive Insight:

Frost Bank is hot on the heels of several other lenders that have opted to slash NSF fees while maintaining some overdraft charges in recent times. Merger partners New York Community Bank and Flagstar Bank announced they would jettison NSF fees this summer. 

And over the winter, a bevy of larger lenders including Bank of America, Wells Fargo, U.S. Bank and M&T decided to drop NSF fees while reducing their reliance on overdraft.

Frost Bank became one of the first movers in a wave of lenders to overhaul its overdraft and related fees model in April 2021, when the firm launched an overdraft grace feature that allowed customers who had received more than $500 in direct deposits that month to overdraw their accounts up to $100 without incurring a charge.

The $51.3 billion-asset bank estimated the program has helped more than 64,000 families obtain needed goods and services without paying a fee since 2021. 

“We’ve had a program that’s favorable to our customers for many years. And a lot of the changes you’re seeing out in the industry are things that we’ve been doing,” Frost Bank’s chief consumer banking officer, Jimmy Stead, told Banking Dive, pointing to offerings like free overdraft protection between linked accounts and early paycheck access. 

All of the bank’s customers with a Frost Personal or Frost Plus account will have access to the overdraft grace program unless they decide to opt out. 

"We understand that people sometimes make a mistake or have a need that requires a little more money,” Stead said. “We're the friend that will spot them $100 when they need it.”