Citigroup is finally doing away with overdraft fees, which makes it the biggest US bank to announce the elimination of the controversial charges.
By this summer, Citi plans to officially be done with charging overdraft fees, non-sufficient funds fees and overdraft protection fees, the bank exclusively told CNN.
The changes mean Citi will become the only bank among the top five US retail banks by assets to do away with the fees that many Americans despise, and that consumer advocates have said unfairly target those that are most vulnerable.
Citi will be added to the growing list of lenders that are making changes or outright eliminating overdraft fees due to the pressure from lawmakers and the growing competition coming from online rivals.
Alex Horowitz, principal officer at The Pew Trusts, applauded the elimination of overdraft fees by a major ban, calling it an “unequivocal win” for consumers.
“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.”
The company also said it will continue to provide overdraft protection services that will help consumers cover negative balance transactions, which includes the ability to transfer funds from a linked Citi savings account and an automatic personal line of credit. The bank said fees for those services are also part of the elimination.
“We’re tremendously proud to eliminate these fees altogether,” Gonzalo Luchetti, CEO of US Personal Banking at Citi, told CNN in a statement. “These changes empower our customers to build long-term financial wellness with access to more affordable banking services.”
