Canadian customers and immigrant entrepreneurs look across the border in hope as banks in USA drop overdraft fees.
Canadian customers struggling at the high overdraft fees are closely watching the latest developments in USA and the waiver of overdraft charges. Toronto-Dominion Bank’s U.S. retail-banking unit is eliminating charges for overdrafts of $50 or less, joining a parade of lenders revamping their fees amid criticism from politicians, regulators and consumer advocates.
TD Bank also is giving customers who overdraw their accounts by more than that amount 24 hours to fix the issue before incurring a fee. The bank is eliminating transfer fees for customers using savings overdraft protection services, and will notify customers when their balances are getting low.
U.S. lenders including Bank of America Corp., Wells Fargo & Co. and U.S. Bancorp have eased off overdraft charges with lawmakers including Democratic Senator Elizabeth Warren calling the fees abusive. Financial-technology firms are under pressure to do the same or face stiff penalties. TD Bank is the 2nd largest bank in Canada and also has millions of customers in the U.S.
Overdraft fees in Canadian banks.
RBC, TD, Scotia, CIBC, BMO and all the other major banks in Canada charge at least $5 per overdraft and over 21% in annual interest fees.
The banks also charge almost $50 for Non-sufficient funds (NSF). There has not been much of a regulatory clamour or consumer backlash for the overdraft charges in Canadian banks.
Canadian customers, and immigrants especially are hoping that the elimination of overdraft fee in USA, will soon be emulated by the banks in Canada.