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Customers who overdraw their accounts will no longer face a $25 penalty, the bank said Wednesday. The change applies to the roughly 3.6 million checking, savings and money-market accounts at Ally’s online bank.
Ally decided to eliminate the fees after positive customer feedback when it temporarily suspended the charges in the early months of the Covid-19 pandemic, said Diane Morais, Ally Bank’s president of consumer and commercial banking. Last summer’s protests for racial justice also drove the decision to nix the fees, she said. The charges disproportionately affect people who are living paycheck to paycheck, Ms. Morais said, and the bank also studied research that found that overdraft fees disproportionately affect Black and Latino households. “We came to the conclusion that these fees are a great source of stress and anxiety for consumers,” Ms. Morais said. “It became clear to us that the best way to relieve that anxiety was to eliminate those fees.” Many big banks were lenient on overdraft fees when the pandemic hit, with most waiving the charges when customers asked for help. Last year, banks’ overdraft revenue fell for the first time in six years, according to financial-data firm Moebs Services Inc.
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