BoA changes policy on checking account overdraft protection

Recently, one of the largest banks in the country announced that it is changing its policy regarding overdraft protection on checking accounts.

Bank of America said that rather than charge consumers a fee through an overdraft protection program, account holders who try to make a purchase without sufficient funds will instead have their transactions denied.

Susan Faulkner, the bank’s executive for deposits and card products, said its customers told BoA that they want to know whether an account will become overdrawn as the result of a purchase.

"Our solution is simple, clear and helps customers control their finances by reducing the possibility of over-extending themselves at the point of sale with a debit card," Faulkner said.

Consumers who still want a form of overdraft protection can link their checking account to another account, which can act as a backup for making purchases.

The changes from BoA echo a rule change put forward by the Federal Reserve Board. Through the new regulation, banks will not be allowed to enroll customers into overdraft protection unless they get permission to do so.