Dive Brief:
- PNC Bank will no longer charge nonsufficient funds (NSF) fees on personal checking accounts, the Pittsburgh-based lender said Thursday.
- The bank had eliminated NSF fees for customers of its Virtual Wallet tool in April 2021, when its low-cash mode product launched, and is now extending that policy across its user base, it said.
- "Over the last several years, we've made significant enhancements to our overdraft solutions, all of which are designed to help our customers and give them better control of their financial future,” Alex Overstrom, PNC’s head of retail banking, said in a press release Thursday. “Eliminating NSF fees on consumer deposit accounts is just another way we are helping our customers strengthen their financial wellness.”
Dive Insight:
PNC is far from the first bank this year to cut back on NSF fees. Citizens Bank and San Antonio-based Frost Bank each committed in June to doing away with the fee, charged when a payment is returned because a customer’s account doesn’t have enough to cover the cost.
Buffalo, New York-based M&T Bank said it would eliminate NSF fees by this year’s second quarter.
New York Community Bank and Flagstar Bank, which are in process of merging, eliminated NSF fees as of Aug. 1.
BMO Harris announced it would curtail NSF fees this month, in addition to lowering its overdraft fee from $36 per charge to $15.
And KeyBank said it would curb NSF fees “late this year,” among a host of other changes to its fee structure. The Cleveland-based lender in April pledged to reduce its overdraft fee to $20 per instance, cut the maximum number of times a customer can be charged an overdraft fee to three per day, and institute a negative account balance threshold — wherein the bank won’t charge customers an overdraft fee unless their account is $20 or more in the red.
Banks, especially over the past year, have turned away from relying on overdraft and related penalties. But for lenders who may be reluctant to eliminate the fees altogether, cutting the NSF fee appears a popular compromise — and a test of just how much revenue banks are comfortable losing. Columbus, Ohio-based Huntington Bank, for example, took an even more intermediate step, reducing its NSF fee to $15 from $36.
PNC is not the largest bank to jettison NSF fees this year. Bank of America pledged to eliminate NSF fees by February and reduce its overdraft fee from $35 to $10 in May. Wells Fargo committed to cutting its NSF fees by March and said it would roll out a 24-hour grace period in the third quarter of this year to help customers avoid overdraft fees. U.S. Bank eliminated certain NSF fees as of January.
Citi in February became the largest U.S.-based bank to eliminate overdraft fees, joining Capital One and Ally — which did the same last year.
