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March 10th, 2010
05:07 PM ET

Financial Dispatch: Big bank scrapping some fees

 

 Andrew Torgan
CNN Financial News Producer 

Facing a withering crossfire of complaints about excessive fees, Bank of America says that it plans to ditch overdraft fees on debit card purchases this summer. 

The Federal Reserve recently announced new requirements that are slated to go into effect in July, but BofA’s move goes one step further

The Fed's new rules will prevent banks from automatically enrolling customers in overdraft protection programs, which charge fees when consumers spend more than they have in their accounts. More than 75% of banks automatically sign customers up for overdraft programs, according to a study by the FDIC. 

But under BofA's new policy, the bank will deny transactions for customers using their debit cards if they didn't have sufficient funds in their checking accounts to cover the charges.

For customers who attempt to withdraw insufficient funds at one of BofA’s 18,000 ATM machines, the bank will alert them that a $35 overdraft fee will kick in if they continue and ask them to confirm or decline the transaction. 

The new policy kicks in for new Bank of America customers beginning in June, and for existing customers starting in early August. 

Rival bank JPMorgan Chase reduced the maximum number of daily overdraft fees from six to three in January, and says it will implement additional reforms at the end of the month and this summer. 

The Center for Responsible Lending says overdraft fees on debit card and ATM transaction account for about half of all overdraft fees, which total nearly $24 billion annually.

State unemployment picture brightens

A total of 30 states and Washington, D.C., reported rising unemployment rates in January, down from 43 in December.

Jobless rates decreased in nine states, according to the Labor Department's monthly report on state unemployment. Eleven states reported no change.

Twenty-five states posted jobless rates lower than the national unemployment rate of 9.7% in January. Eleven states and Washington, D.C., reported rates higher than the national average, down from 17 states and Washington, D.C. posting rates higher than the national average of 10% in December.

Michigan again had the highest rate of unemployment at 14.3%. Second was Nevada at 13%, followed by Rhode Island at 12.7%. For South Carolina, fourth at 12.6%, and California, fifth at 12.5%, the January jobless rates were record highs.

North Dakota was again the state with the lowest jobless rate, at 4.2%.

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Today, the Nasdaq closed at less than half that level - 2,358 and change.

So take a trip with CNNMoney.com back to a time when some entrepreneurs believed that shipping a 40lb. bag of dog food or a single pint of ice cream to your front door or would make them millionaires.

It’s a tale of sock puppets, Super Bowl commercials and a seemingly inexhaustible supply of hubris.

Follow the money… on Twitter: @AndrewTorganCNN


Filed under: Andrew Torgan • Finance
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