Chase to End $34 Fee on Accounts Overdrawn by $5

JPMorgan Chase will stop charging overdraft fees incurred by transactions that leave an account overdrawn by $5 or less, according to the bank’s checking disclosure notice.
The new policy, beginning July 22, will help customers avoid a $34 “insufficient funds fee” if their checking account balance is overdrawn by $5 or less at the end of the business day.
Additionally, Chase will not charge the overdraft fee for any item that is $5 or less, even if the ending account balance is overdrawn.
The same $5 threshold applies to Chase’s $34 “returned item fee” for each item the bank does not pay.
The biggest U.S. bank by assets seems to be bucking a trend by other banks of charging higher or new checking account fees.  Banks are seeking to overcome revenue losses from credit card reform and new regulation limiting debit-card transaction fees charged merchants.
Chase is not the only big bank to allow small overdraft amounts. U.S. Bancorp does not charge an overdraft fee for transactions less than $10. SunTrust does not collect an overdraft fee on items that are less than $5.
Excessive checking account fees and semi-hidden fee policies have been scrutinized lately by both government watchdogs and consumer groups.
Earlier this month, Pew Charitable Trusts released a study that found checking account disclosures and fees still contain “hidden risks,” such as hard-to-understand disclosures, unclear options on overdraft costs and extended overdraft penalty fees with a median increase of 32 percent since 2010.
The Consumer Financial Protection Bureau has initiated a review of checking account overdraft programs – and seeks public input – to determine their impact on banking customers.
The average overdraft fee ranged from $30 to $35 in 2011, and has increased by 17 percent over the past five years, the CFPB said.
Chase has a $15 “extended overdraft fee” that is charged once after your account is overdrawn for five consecutive business days. You will be charged this fee even if your account is overdrawn by $5 or less

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