Financial institutions

Capital One scraps overdraft fees, joins other financial institutions – WSB-TV Channel 2

Capital One is the latest financial institution to remove overdraft fees.

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The company announced Wednesday that customers will be able to withdraw their accounts but won’t be charged for doing so, The Associated Press reported.

It now joins other companies like Ally Bank and PNC in not charging customers overdraft fees or offering programs that would protect an account holder from fees.

Company CEO Richard Fairbank said it was part of “our effort to bring ingenuity, simplicity and humanity” back to banking, the AP reported.

Capital One also said it will offer free overdraft protection to its customers starting next year.

Clients who already have overdraft protection will be converted to the program free of charge. Others who are not registered may choose to do so if they are eligible. If customers decide they don’t have overdraft protection and they try to overdraw their account, the transaction will be declined and no fees will be charged, Capital One said in a statement.

The announcement came the same day the Consumer Financial Protection Bureau said financial firms won $15.5 billion in overdraft fees in 2019.

CBS News reported that the average fee for overdrafting an account was $33.58 in 2021, according to Bankrate.