Dive Brief:

• Columbus, Ohio-based Huntington Bank will reduce — from $36 to $15 — the amount a customer is charged when overdrawing an account, or for having non-sufficient funds, beginning in July, the bank announced Tuesday.
• The bank is also launching, in April, a feature giving users immediate access to up to $500 from check deposits, it said.
• Huntington took in $138.5 million from service charges tied to consumer deposits between July 2020 and June 2021, S&P Global found last year. That ranked 15th, by amount, among U.S. banks, and accounted for 2.7% of Huntington’s operating revenue.

Dive Insight:

Tuesday’s moves are hardly Huntington’s first in the race to lessen reliance on overdraft fees. The bank last year launched Standby Cash, a digital-only loan product that lets customers avoid overdraft by accessing a line of credit up to $1,000 with no interest or fees if they sign up to repay the line in three monthly automatic payments. (Without automatic payments, customers are charged a 1% monthly interest charge on the outstanding balance.)

Huntington CEO Steve Steinour estimated the slash in overdraft fees would cost the bank about $14 million per quarter, American Banker reported Tuesday.

"Over a few years, we’ll make that back — new customers, lower attrition, more business," Steinour said. "There is some near-term pain or challenge with some of the decisions we’ve made, but we believe they’re in the long-term best interests of our customers and therefore of our shareholders."

The reduction from $36 to $15 per charge parrots a move Buffalo, New York-based M&T Bank undertook last month. Bank of America said in January it would lower its overdraft fee from $35 to $10 starting in May.

Still, other banks, such as Ally and Capital One, have committed to eliminating overdraft fees altogether. Citi last month became the largest U.S. bank to abolish the charges, saying it would do so by this summer.

Huntington’s new products align with its "Fair Play Banking" approach, introduced in 2010 with the launch of 24-Hour Grace, an early product to help customers avoid overdraft fees. Huntington extended its grace option to business customers in September 2020 with "Safety Zone,” which lets users overdraw their accounts by up to $50 without penalty.