Capital One is the latest financial institution to do away with overdraft fees.
The company announced Wednesday that customers will be able to overdraw their accounts but they will not be charged to do so, The Associated Press reported.
It now joins other companies like Ally Bank and PNC in either not charging customers the overdraft fee or offering programs that would protect an account holder from being hit with the fee.
Company CEO Richard Fairbank said it was part of “our effort to bring ingenuity, simplicity and humanity” back to banking, the AP reported.
Capital One also said it will be offering overdraft protection for free to its customers starting next year.
Customers who already have overdraft protection will be converted to the no-fee program. Others who are not enrolled can choose to do so if eligible. If customers decide not to have overdraft protection and they try to overdraw their account, the transaction will be declined and no fees assessed, Capital One said in a statement.
The announcement came the same day that the Consumer Financial Protection Bureau said that financial companies earned $15.5 billion in overdraft fees in 2019.
CBS News reported that the average fee for overdrawing an account was $33.58 in 2021, according to Bankrate.
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