Wells Fargo creating checkless and limited-overdraft bank accounts
In an attempt to curry public goodwill, Wells Fargo is taking on overdraft fees for vulnerable customers.
Wells Fargo has announced the creation of two new bank accounts that limit or eliminate entirely overdraft fees while ensuring ready and convenient access to bank services.
At a glance:
Checkless checking account
Features: Checking account, transfers and purchases limited to funds available in account and direct deposits due to be deposited on the next business day, Zelle person-to-person money transfers, access to Wells Fargo Mobile app and Wells Fargo Online, debit card access, access to over 13,000 ATMs nationwide
Fees: $5 monthly fee
Availability: Spring 2021
Limited overdraft fee checking account
Features: Checking account, overdraft charge limited to one per month, bank intervention when the customer is in danger of incurring an overdraft, Zelle person-to-person money transfers, access to Wells Fargo Mobile app and Wells Fargo Online, debit card access, access to over 13,000 ATMs nationwide
Fees: $10 monthly fee, $35 overdraft fee
Availability: Spring 2021
The first will be a checkless checking account that limits transactions strictly to funds available in the account. The other account will be a check-based checking account where the overdraft charge will be limited to one per month. Both accounts will involve proactive warnings informing accountholders who have experienced overdrafts before that their accounts are in danger of incurring an overdraft again. They will also provide education on how to avoid overdrafts and Wells Fargo’s automatic look back service, which will check to see if there are any direct deposits forthcoming before declaring that there is an overdraft on an account. Typically, Wells Fargo charges an overdraft fee of $35, with a cap of three overdraft charges per day.
Both accounts have yet to be formally named. It is also unknown if the accounts will be available to online-only customers.
A response to customer needs
The creation of these accounts may be an attempt to garner good will. Wells Fargo CEO Charlie Scharf is scheduled to testify before the House Financial Services Committee next week, while company chair Betsy Duke and board member James Quigley are set to appear the following day. Following the bank’s scandal where it opened millions of fake accounts without its customers’ approval or knowledge, the bank has been under intense scrutiny and a veil of suspicion.
“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,” said Mary Mack, CEO of consumer and small business banking, in an announcement.
“We know many consumers 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. These new offerings will help us satisfy the financial needs of more customers and further expand access to mainstream banking services.”
These accounts will be marketed to customers new to bank products and checking accounts. The checkless bank account will have a service fee of $5 per month, while the check-based account will have a service fee of $10 per month. Both accounts will be available early next year.
“This is something that we’ve really been working on for quite some time,” said Ed Kadletz, who leads Wells Fargo’s deposit products group, in a Bloomberg interview. “Charlie has brought an energy and a focus to the company to really get after the things that are most important, and so this has been able to bubble to the top.”