KeyCorp (KEY) Announces Changes to NSF and Overdraft Fees – September 20, 2022
The changes announced by Key Corp (KEY – Free Report) earlier this year regarding its insufficient funds (NSF) fee and overdraft fee went into effect. The bank announced that the new terms will come into effect for personal and small business checking and savings accounts from September 16, 2022.
Last April, KeyCorp announced plans to eliminate NSF fees and reduce overdraft fees.
According to the latest announcement, the following changes have been implemented.
There is a key coverage area, which means customer accounts that are overdrawn by $20 or less at the end of the day will not be charged overdraft fees. Charges for NSF fees have been eliminated. Additionally, the $0 overdraft protection transfer fee is expanded to include transfers from eligible credit products.
Overdraft fees outside the key coverage area and recurring overdraft fees are now $20. The maximum number of transactions that would incur overdraft fees has been reduced from 5 to 3 at the end of each day.
The updates aim to provide customers with more flexibility and convenience, and help them worry less about their finances. The changes complement the bank’s current tools aimed at helping customers get ahead financially, including the Key Secure Credit Card, KeyBank Loan Assist and KeyBank Hassle-Free Account.
Daniel Brown, Director of Consumer Product Management at KEY, said, “We took time and care to listen to our customers’ feedback and study industry best practices to develop this program. . We know unexpected overdrafts can happen and we’re proud to introduce Key Coverage Zone as a safety net for our clients. Additionally, the elimination of NSF charges, along with our other overdraft enhancements, is the next step in creating greater flexibility for our customers. »
He added: “We are excited to take the next steps to make banking easier – and better. We are a relationship bank and we continually strive to improve our programs to provide the superior products and services our customers deserve.
So far this year, KEY shares are down 22.9% against the industry’s 20% decline.
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Currently, KeyCorp carries a Zacks rank #3 (Hold). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In recent times, banks have come under increased scrutiny from regulators and lawmakers for charging consumers overdrafts and other fees. Several U.S. consumer banks have been told to eliminate all consumer overdraft fees to protect customers.
Similar to KEY, banks like Bank of America (BAC – free report) and Citigroup (VS – Free Report) have stopped charging NSF and overdraft fees.
In January 2022, Bank of America announced changes to its overdraft services, including plans to remove NSF fees, starting in February, and reduce overdraft fees to $10 from $35, starting of May. The company also waived transfer fees associated with its Balance Connect overdraft protection service in May.
Since 2010, BAC has taken several steps to “enable our consumer and small business customers to bank with more confidence and reduce the use of overdrafts.” The efforts have significantly reduced overdraft fees. Such measures, in addition to SafeBalance No Overdraft Fee and Balance Assist accounts, will reduce overdraft fee revenue by 97% from 2009 levels.
In February, Citigroup announced it would completely waive overdraft fees, item return fees and overdraft protection fees by this summer, making it the largest U.S. lender to do so.
Citigroup’s overdraft fee collection has been among the lowest compared to its peers. Along with a consumer-friendly overdraft policy, the banking giant continues to expand access to banking products and services, making banking more financially inclusive for underserved communities.