Zions Bank joins wave of banks eliminating or reducing overdraft fees

Jul 12, 2022, 6:02 PM | Updated: Jul 14, 2022, 12:07 pm

SALT LAKE CITY — For tens of thousands of Utahns, getting slapped with overdraft fees will soon be much less of a headache.  As one of the state’s largest banks moves to overhaul its overdraft fees, it is the latest example of a trend of moving away from such fees in the banking industry.

Sure, banks make money off the interest rates on loans, but a huge chunk of their cash also comes from fees. Last year, a study shared with the KSL Investigators found banks collectively earned $114 billion dollars more in fees over the past decade, than they paid out in interest. Now, a sea change is washing over the banking industry.

“Two of our previous overdraft fees that have now been eliminated,” said Rob Brough, executive vice president of marketing and communication for Zions Bank.

Brough said his bank is doing away with its continuing overdraft fee charged to accounts in the red for seven straight days. Zions is also nixing its NSF fees for transactions returned unpaid due to non-sufficient funds. Plus, it is bumping up its overdraft cushion from $5 to $30, so fees will not be slapped on automatically if your account is overdrawn by $30 or less.

“If someone is living paycheck to paycheck, the likelihood that they might find themselves periodically in an overdraft position. It’s much more likely that that would occur and so it’s an opportunity to make banking more accessible,” said Brough.

It is an opportunity many other banks are seizing on. Ally Bank, Citibank and Capital One have already eliminated their overdraft fees. This comes as Chase and Wells Fargo are cutting their overdraft charges or limiting their use.

But wiping away these fees is a big, big revenue loss for these banks. Even Zions Bank estimates this change will cost them $7.4 million dollars, every year. So, what is in it for them?

“Banking is very competitive,” explained Brough.

He said the competitive landscape has toughened significantly in recent years. They are now up against big banks, small banks, online and mobile-first banks, not to mention fintech companies. So, they must provide services customers like or lose them to a competitor. And customers are not exactly fans of fees.

“We think for us, there’s an opportunity in this, to not only maintain our competitiveness but also create a competitive advantage,” said Brough.

The changes in Zions Bank’s overdraft fees take effect July 13.

KSL 5 TV Live

Top Stories

KSL Investigates

(KSL TV)...
Matt Gephardt

Get Gephardt helps restore West Valley man’s Social Security disability payments

Jeff Davis gets disability payments from the Social Security Administration. At least, he did up until his mom passed away in December.
2 days ago
The Pearsons tell KSL’s Matt Gephardt they should be reimbursed by either the airline or the onli...
Matt Gephardt and Sloan Schrage

Sandy couple Gets Gephardt after booking error left them paying out for pricey return flights

A Sandy couple bought roundtrip tickets to Hawaii, but when they discovered their return tickets were no good, they had to buy pricey replacements. When they were refused reimbursement, they decided to Get Gephardt.
3 days ago
Amy Olsen...
Matt Gephardt

Utahns cleared of DUI accusations are forced to pay to get their licenses back

Amy Olsen has her driving privilege back now, but it cost her $255. For her, it is a frustrating ordeal that began months earlier when a trooper pulled her over.
7 days ago
Gas bill...
Matt Gephardt

Gas company increasing bills for customers on fixed payments plan

If you're told you're going to pay the same price for 12 months, you wouldn't expect the price to go up. But when the natural gas company raised the rates on a Payson woman, she decided to Get Gephardt to investigate.
7 days ago
Follow @KSL5TVLike us on Facebook...
Matt Gephardt

$21 billion in gift cards go unused. Here’s how to avoid letting them go to waste

Gift cards: they are one of the most popular gifts to give and to receive, but that does not necessarily mean they are going to get used.
9 days ago
(KSL TV)...
Matt Gephardt and Sloan Schrage

How to beat the dynamic pricing used by Amazon and many other retailers to pay less

The KSL Investigates team gives you information on how to beat dynamic pricing to get your money's worth and pay less.
10 days ago

Sponsored Articles

Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to Choose What MBA Program is Right for You: Take this Quiz Before You Apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Close up of an offset printing machine during production...
Les Olson IT

Top 7 Reasons to Add a Production Printer to Your Business

Learn about the different digital production printers and how they can help your company save time and money.
vintage photo of lighting showroom featuring chandeliers, lamps, wall lights and mirrors...
Lighting Design

History of Lighting Design | Over 25 Years of Providing Utah With the Latest Trends and Styles

Read about the history of Lighting Design, a family-owned and operated business that paved the way for the lighting industry in Utah.
Fiber Optical cables connected to an optic ports and Network cables connected to ethernet ports...
Brian Huston, CE and Anthony Perkins, BICSI

Why Every Business Needs a Structured Cabling System

A structured cabling system benefits businesses by giving you faster processing speeds and making your network more efficient and reliable.
notebook with password notes highlighted...
PC Laptops

How to Create Strong Passwords You Can Actually Remember

Learn how you can create strong passwords that are actually easy to remember! In a short time you can create new ones in seconds.
house with for rent sign posted...
Chase Harrington, president and COO of Entrata

Top 5 Reasons You May Want to Consider Apartment Life Over Owning a Home

There are many benefits of renting that can be overshadowed by the allure of buying a home. Here are five reasons why renting might be right for you.
Zions Bank joins wave of banks eliminating or reducing overdraft fees