Ally Bank said Wednesday it is eliminating overdraft fees on all accounts.
Further, the vast majority of the banking customers that pay overdraft fees are also considered "financially vulnerable" and disproportionately belong to minority groups, according to a separate FinHealth Spend report.
Those customers who are disproportionately impacted are typically those on the lower end of the socio-economic scale."There's been a lot of attention on this topic," said Diane Morais, president of consumer and commercial banking at Ally Bank, and "it will continue to be an area of focus." Although Ally has just under 2½ million banking clients, only about 1% have been subject to overdraft charges, Morais said.
"Those customers who are disproportionately impacted are typically on the lower end of the socio-economic scale," she said. Before the new policy went into effect, the online-only bank changed $25 for overdrawing an account. Going forward, smaller transactions will likely be approved even if there aren't enough funds to cover the cost, but larger transaction may be declined, Morais said.