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CitiBank’s New Checking Account Has No Checks or Overdraft Fees

Wednesday, September 24, 2014

This week, CitiBank became the latest in a band of banks to unveil a new checking account – one without checks or overdraft fees. This move not only underlines the rapidly declining use of checks – but also awareness about the harmful financial effects bank fees have on consumers, especially economically vulnerable consumers.

Rachel Anderson of CRL comments:

Excessive and unpredictable bank fees have a punishing impact on financially vulnerable Americans. These fees can drain accounts and family wealth – and push some families out of the banking system entirely. Of these fees, overdraft can be the most insidious – large, unpredictable, and usually incurred on the most minimal of transactions. This move to eliminate banking fees is a positive move for American families across the country.

Over the last 15 years, overdraft programs have evolved from an occasional courtesy to a practice designed to extract fees from consumers. Revenue from these bank fees doubled between 2004 and 2008 due largely to the expansion of overdraft fees to debit cards; in 2011, these fees alone brought in nearly $17 billion for banks. Overdraft fees on debit cards are particularly noxious because banks incur virtually no cost to decline the purchase. Even following a 2010 "opt-in" rule that required banks to ask consumers if they wanted overdraft protection, these high, often surprise fees continue to drain consumer accounts.

CRL is heartened to see one of the nation's largest banks offer a better structured and more predicable approach to checking accounts. We hope this move will lead to a strong consumer-focused overdraft rule from the Consumer Financial Protection Bureau.

For more information, contact Catherine An at or 202-349-1878.