Wells Fargo to launch zero- and limited-overdraft fee accounts
(Updated at 7:45 p.m. EST with additional background)
Wells Fargo is launching no-overdraft and limited-overdraft accounts that target young consumers and existing customers that have trouble maintaining funds in a traditional checking accounts.
The San Francisco-based bank will first offer a checkless account with a flat monthly fee of $5, which allows customers to only spend available funds but charge no fees for overdrafts or insufficient funds. The second limited overdraft account is a checking account with a $10-monthly fee, which will cap overdraft or insufficient funds fees at one per month. The accounts will become available starting in early 2021.
"Wells Fargo is listening to our customers to make sure we are delivering the financial products and services they want, and we are meeting their needs for fast, secure and convenient banking," Mary Mack, CEO of Consumer and Small Business Banking at Wells Fargo. "We know many customers are seeking low-cost bank accounts that help them avoid overspending and keep to a budget, as well as access to all our mobile, online, ATM, branch and phone banking services."
Wells Fargo collected about $1.97 billion in overdraft fees in 2019, according to filings with federal regulators.
Wells Fargo endured a major scandal last year after revelations that it charged customers hundreds or thousands of dollars in overdraft fees after the bank informed them that their accounts were being closed. A Wells Fargo spokesman said the new account offerings are not related to the overdraft controversy.
Since 2016, the bank has offered a reloadable prepaid card called the Wells Fargo EasyPay account, which charges a $5 monthly fee and no overdraft fees.
The bank said it plans to reach out to existing customers that may be having trouble with overdraft fees. The accounts are designed to meet a standard set by the Cities for Financial Empowerment Fund's Bank on National Account Standards.
The checkless account will include the following features:
- Access to the Wells Fargo Mobile app and Wells Fargo Online.
- Account alerts, including a zero balance alert.
- Zelle, which offers P2P transfers and bill payment.
- A Wells Fargo debit card with zero liability protection.
- Access to 13,000 ATMs nationwide.
- Full-service banking at 5,400 branches nationwide and 24-hour customer service by phone.