U.S. Treasury Secretary Timothy Geithner praised a move by Bank of America (NYSE: BAC) to prevent customers from over drafting their accounts, effectively eliminating overdraft fees, and encourage other major banks including Citibank (NYSE: C), JP Morgan Chase (NYSE: JPM) and Wells Fargo (NYSE: WFC) to do the same.
“We welcome these efforts by banks to try to begin the process of restoring trust and confidence for their customers and we welcome the fact that we’re seeing banks try to get ahead of the president’s financial reform effort that is now working its way through Congress,” Geithner told a U.S. House of Representatives Appropriations subcommittee.
Bank of America announced on Wednesday that it would be cutting its debit card overdraft fees and would be making up the lost revenue by pricing deposits appropriately and taking other steps to reduce levels of consumer turnover.
Geithner did not name any banks specifically, but said that he hoped all large-banks would take similar actions to lower fees.
“After a period in which we saw many financial companies competing to exploit vulnerable borrowers, it’s good to see banks once again competing to benefit their customers and I want to urge other large banks that have not acted to follow the lead of their competitors,” he said.
