Hampton Roads consumers set to save money as some banks reduce or eliminate ‘junk fees’ – The Virginian-Pilot

According to the Consumer Financial Protection Bureau, “junk fees” drain tens of billions of dollars from US budgets each year.

Costs to consumers can appear in a variety of forms, including late fees, overdrafts, returns, out-of-network ATMs, money transfers, and inactivity fees.

Now, some Hampton Roads banks have reduced consumer fees while others have eliminated some fees altogether.

The changes come after those fees came under scrutiny from U.S. lawmakers and the Consumer Financial Protection Bureau. The Office of the Comptroller of the Currency, a national banking regulator, expressed concern about the effect of overdraft fees on low-income people late last year.

Towne Bank, based in Suffolk, immediately reviewed consumer charges and initiated three big changes on April 1, said chairman and chief operating officer Brad Schwartz.

Towne has completely eliminated the $42 NSF fee and the $13 fee associated with transferring funds from a savings account to a checking account in the event of an overdraft. The bank now allows up to $50 overdraft without charging a fee, Schwartz said.

“We know that with inflation and gas prices, it’s even more difficult there. The focus was on trying to help people who often just didn’t have enough funds in their account,” Schwartz said. “It was income we used to earn, but we decided it was the right thing to do.”

Richmond-based Atlantic Union Bank regularly reviews its overdraft and insufficient funds fees and practices to determine any improvements based on changes in the industry and customer expectations, said Alison Holt-Fuller, chief operating officer. front-line product and business risks.

Effective in the third quarter, Atlantic Union eliminated its insufficient funds fee for consumer deposit accounts and eliminated the fee assessed when transferring funds from a deposit account or line of credit to cover an overdraft. , said Holt-Fuller. The bank also reduced the number of overdraft fees that can be assessed in a day and introduced a no-fee overdraft verification product to give consumers greater access to lower-fee bank accounts.

Bank of America said it stopped charging for insufficient funds and returned item chargeback fees. The bank also eliminated its overdraft protection transfer fee, reduced overdraft fees from $35 to $10, and reduced the number of fees to two from four per day.

Hampton-based Old Point National Bank recognizes the burning and significant issue and is focused on reviewing and assessing its fees, said Laura Wright, chief marketing officer and vice president, although she does not have no changes to share at this time.

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Competition is also exerting pressure for banking changes.

The Newport News-based Langley Federal Credit Union wants all of its members to receive fair treatment where no one has to pay exorbitant fees for the occasional mistake, said President and CEO Tom Ryan.

That’s why, in early 2020, the credit union capped the number of times per month a member could be charged for NSF transactions. Fred Hagerman, senior vice president and chief marketing officer, said the credit union also reduced actual fees from $30 to $10. And Langley’s courtesy payment, a service where it covers the transaction even when funds run out, has been reduced from $30 to $20 with a minimum of $10 before fees are charged.

“That means just overdrafting a few dollars won’t incur any fees at all,” Hagerman said. “These are not small changes. Approximately 40,000 members will save more than $4.5 million in annual fees as a result of these changes.

Sandra J. Pennecke, 757-652-5836, [email protected]