Capital One is dropping overdraft fees for consumer banking customers, the bank said Wednesday.
Big banks have been cutting back consumer fees as they face pressure from both startup neobanks as well as Washington regulators .
Neobanks have touted their fee-free accounts as a selling point over traditional banks. Meanwhile regulators have been looking closely at the fees, which some consumer advocates say unfairly target those who can't afford them.
The move would reportedly cost about $150 million per year
for the bank
Some traditional banks such as Ally have dropped these fees, but Capital One is the biggest yet to do so.
The CFPB recently said in a report that overdraft fees generated $15.47 billion in revenue in 2019 for banks — a profitable trend that continued even during the pandemic.