By this summer, Citi plans to get rid of overdraft fees, non-sufficient funds fees and overdraft protection fees, the bank exclusively told CNN on Thursday.
The changes mean Citi will be the only one among the top five US retail banks by assets to abolish the fees that many Americans despise, and that consumer advocates say unfairly punish society's most vulnerable.
"It's great news because it helps consumers stay in the banking system and avoids them from being charged penalty fees at a time when they can least afford it," Horowitz said."And it gives them time to recover from a financial difficulty and get back on their feet. It can help keep households solvent."
It's worth noting that, at least as of recently, Citi has not relied on overdraft-related fees for revenue as much as many of its peers. That suggests the bank won't take a sizable hit by getting rid of the fees. Based on its $1 trillion in US assets at the end of last year, Citi is America's fourth-largest bank. The largest US bank is JPMorgan.In December, Capital One became the first big bank to promise to eliminate overdraft fees. The No. 10 US bank by assets with $381 billion as of the end of 2021, Capital One said it would end all fees for overdrafts and non-sufficient funds, also known as bounced checks.
Last year, JPMorgan Chase also said customers won't pay overdraft service fees when their accounts are overdrawn by $50 or less, and eliminated the fees incurred when the bank doesn't pay a check or electronic payment when customers don't have enough money in their account.Most of America's top 20 banks have made significant changes to overdraft fees recently, including eliminating fees and providing grace periods, according to The Pew Trusts.