BoA Scraps Debit Card Overdraft Fees

Bank of America is scrapping overdraft fees on debit card purchases ahead of new federal regulations. As of this summer, overdrawn customers of the nation's largest debit card issuer will simply have their cards declined at the register—rather than ending up paying $40 for coffee or some other small purchase, reports the New York Times.

The decision could put pressure on other banks. Overdraft fees have recently become a major source of revenue for banks, generating $20 billion last year alone, and debit card purchases account for 60% of BoA's overdrafts. "If Bank of America can forgo the fee income and do the right thing by their customers, this should be seen as a direct challenge to the other big banks to match and do the same," says a BoA adviser.