Citizens (CFG) relaxes overdraft fee policy on checking accounts

Citizens Financial Group CFG has recently launched numerous initiatives to make banking articulate, carefree and accessible, with the aim of helping clients to better manage their financial life. New ways for customers to avoid overdraft fees and a promise to help undeserved communities easily access banking services were also included in the new initiatives announced.

The bank has introduced a new deposit feature, Citizens Peace Of Mind, which gives customers the ability to avoid unforeseen overdraft fees. This feature was added to all citizen checking accounts on October 1. Consumers, who have unexpectedly discovered their accounts, are allowed to deposit or transfer enough money to bring their accounts back to a positive available balance before the close of business the next day. This will automatically remove the overdraft fees charged.

Citizens Peace Of Mind complements the $ 5 Overdraft Pass, an overdraft protection feature where consumers are not charged if they discover their account with a transaction of $ 5 or less. The bank has been offering this functionality for several years on all of its checking and monetary accounts.

The new feature also brings new cutting-edge technological skills that supervise and alert clients to overdraft withdrawals, keeping them informed of their finances, thus facilitating decision-making.

Brendan Coughlin, Head of Consumer Banking at Citizens, said: “Life can be hectic, and we believe a bank should operate as a transparent and trusted financial partner, helping customers keep more of their money. their hard earned money in their pockets.

In recent months, Citizens has also implemented a student checking account with no overdraft fees and an automatic annual overdraft discount on certain products.

Apart from that, continuing its commitment to helping underbanked communities, Citizens also announced that it will unveil a new checking account with no overdraft fees and features in the first quarter of 2022 that will meet Bank On National Account standards. These standards are set to ensure that everyone has access to a clear, smooth and profitable transactional account.

Citizens are partnering with 100 banks and credit unions across the United States to meet the standards, which aim to strengthen access to the banking system for underbanked people in a safe and efficient manner.

Coughlin added, “Through financial literacy and empowerment, the banking community has a responsibility to help all Americans achieve economic security. The CFE Fund’s national Bank On platform supports the efforts of local coalitions and financial institutions to connect consumers to safe and affordable bank accounts.

The deployment of the Citizens Peace Of Mind service is a laudable initiative on the part of the bank to retain its customers as well as to attract new ones. The new checking account that will be launched next year, meeting specific accessibility criteria for low-income people, is also a laudable initiative. Its strategy of expanding its presence by investing in technology will pay off in the long term.
However, the removal of overdraft fees is expected to result in lower commission income, which will put a strain on revenue growth.

Citizens’ stocks have gained about 7.3% in the past six months, outperforming industry growth of 4.3%.

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The stock currently carries a Zacks Rank # 3 (Hold). You can see The full list of today’s Zacks # 1 Rank (Fort Buy) stocks here.

Competitive landscape

Following U.S. Senate hearings in May 2021 on how banks charge overdraft fees and criticized the practice during the pandemic, banks began to remove the fees and roll out lower-cost alternatives.

Earlier this month, Regional finance companyThe RF subsidiary of, Regions Bank, announced a new checking account with no overdraft fees, the Regions Now Checking account. The account will include the convenience of modern banking services, while eliminating overdraft fees.

In June, Ally Bank, an indirect wholly-owned banking subsidiary of Ally Financial Inc. ALLY, announced the elimination of overdraft fees on all accounts, with no requirements or restrictions.

During the same month, Toronto-Dominion BankTD’s subsidiary, TD Bank, has revealed plans to launch TD Essential Banking Services, offering a low-cost deposit account with no overdraft fees.

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