Report: Bank of America considers stopping checking account overdrafts

by: Scott Wickersham Updated:

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CHARLOTTE, N.C. —

Charlotte-based Bank of America is considering a move that would effectively stop customers from having the ability to overdraw from their checking accounts.

According to the Wall Street Journal, the new plan Bank of America is considering would not let customers overdraw balances at an ATM or when making automatic bill payments.

It would be the first big bank in the U.S. to put it in action.

The plan builds on the bank’s decision a few years ago to stop customers from overdrawing when making debit card purchases.

Most banks allow customers to take out more money than they have in their accounts.

As a penalty, they charge account holders a fee.

Those charges typically range from about $25 to $35 for each overdraft.

Industry experts told the Wall Street Journal an overdraft ban could spread to other areas.

The bank would also not likely cover checks written from accounts with insufficient funds.

This is not the first controversial move the bank has made in the last few years.

In 2011, after widespread public outrage, Bank of America reversed a plan to charge customers a $5 per month debit fee.

The Wall Street Journal said the bank will likely unveil the latest checking-account change in the coming months.

When Channel 9 asked for comment, a bank representative said the plan is speculation at this point.

The bank does not plan to eliminate overdrafts completely and it would not comment further.

According to the financial services group Alix-Partners, in the last year more than 20 percent of U.S. consumers attempted to spend money they didn’t have.