The policy-change, effective March 1, covers consumer deposit accounts at each of the $53 billion bank’s 15 subsidiaries. Wintrust, which previously charged $35 for each transaction that overdrew an account, no longer authorizes ATM and point-of-sale transactions that would result in a negative account balance. The bank still offers an overdraft protection line of credit.
“With real-time notifications and other tools accessible 24/7, we have seen a decrease in overdrafts and item returns as our customers can remedy those situations before they occur,” said Wintrust President Timothy Crane. “We believe that eliminating these charges altogether and working with our consumer banking clients when low balances occur will strengthen our relationships with them.”
Other regional banks have announced similar changes in the last two years. Green Bay, Wis.-based Associated Bank has eliminated NSF fees when an item is returned; overdraft protection transfer fees; and its continuous overdraft fee. In 2022, Iowa City-based MidWestOne became one of the first community financial institutions in the Midwest to reduce its dependence on overdrafts. The bank eliminated charges for transactions of $5 or less that caused an account to overdraw; reduced the maximum number of daily overdraft fees to four from five; and eliminated a previous $10 fee for transfers between deposit accounts to cover overdrafts.
Larger, retail-dependent banks have garnered more attention in reducing their dependence on overdrafts. Brookings Institution Senior Fellow Aaron Klein said in November that banks such as Citibank, Capital One and Ally collected relatively little in overdraft fees before announcing that they were eliminating them entirely. He said banks with a heavier dependence on overdraft fees have been slower to cut back.
“The more a bank depends on overdraft revenue, the less likely it is to give it up without a push,” Klein said. “Even today, a handful of banks and credit unions operate on business models that require a lot of overdraft revenue for their viability.”