Ally becomes first large bank to end overdraft fees

Ally Financial on Wednesday announced that they plan to end overdraft fees, becoming the first large bank to make the move. 

Ally issued a statement saying it eliminated overdraft fees on every customer’s account.  

Ally added that the move comes as part of its “Do It Right” commitment, saying the company has never charged overdraft fees for debit card transactions and had limited overdraft fees to once per day. 

“This is a significant advancement for consumers as we live out our mission and live up to our name – being a true ally. Overdraft fees are a pain point for many consumers but are particularly onerous for some. It is time to end them,” said Ally Financial CEO Jeffrey Brown in the statement. “Nationwide, more than 80% of overdraft fees are paid by consumers living paycheck to paycheck or with consistently low balances – precisely the people who need help stabilizing their finances. Eliminating these fees helps keep people from falling further behind and feeling penalized as they catch up.”  

The topic of ending overdraft fees has taken center stage in recent years. Sen. Elizabeth Warren (D-Mass.) got into a heated exchange with JPMorgan Chase CEO Jamie Dimon during a Senate Banking Committee hearing after she accused big Wall Street banks of overcharging their customers during the COVID-19 pandemic. 

The big bank CEOs came to the Senate today to talk about how they stepped up and took care of customers during the pandemic – and I told them that’s a bunch of baloney. They nickel and dimed their struggling customers with overdraft fees to line their own pockets. pic.twitter.com/yKYwScMUs9

— Elizabeth Warren (@SenWarren) May 26, 2021