Hancock Whitney Societyit’s (HWC – Free Report), banking subsidiary Hancock Whitney Bank, becomes the latest to highlight plans to eliminate consumer non-sufficient funds (NSF) fees and certain overdraft (OD) fees by the end of this year.
In particular, the company will waive all NSF fees, certain OD protection transfer fees, and sustained OD fees. HWC will also increase its existing OD balance threshold, providing customers with a higher cushion before charges are assessed.
The elimination of NSF and some OD fees will likely reduce the company’s fee revenue, with management expecting service fees on deposit accounts to reduce by $10-11 million each year .
In addition, to help customers better manage their financial lives, the company will change other consumer checking account features and products.
Earlier this month, Hancock Whitney launched Early Pay. This feature is available with any Hancock Whitney checking account or savings account. It allows customers to access their deposited payroll directly up to two days earlier and helps them manage their expenses, cash needs and avoid overdrafts.
Apart from this, Hancock Whitney will offer a checking product, Assure Checking, which is a new account with no overdraft fees. The account will allow customers to avoid overdrafts and overdraft fees. It will be part of a wider suite of deposit products launching later this year to help consumers avoid payday lenders.
Rolling out the latest offers is a commendable move by the bank to retain consumers and attract new ones. While a drop in service fees on deposit accounts will likely be a hurdle, HWC has ample opportunity to improve revenue from other avenues. Going forward, robust economic growth and a gradual increase in demand for loans will support incomes. Also, its strategic investments in growth and new markets should help.
HWC shares have gained 7.1% in the past three months against a 1.9% decline in the sector.
Image source: Zacks Investment Research
The company currently carries a Zacks rank #2 (buy). You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
HWC has joined a growing bandwagon of lenders that have eased unpopular charges amid increasing regulatory scrutiny. In May 2021, the US Senate criticized the practice during the pandemic. In December 2021, the US Consumer Financial Protection Bureau indicated that it was considering issuing new guidelines aimed at reducing banks’ reliance on overdraft fees and insufficient funds facilities. Banks raked in $69 billion in the third quarter of 2021 from these fees.
Citigroup Inc. (VS – Free Report) will completely waive overdraft fees, returned item fees and overdraft protection fees by this summer, making it the largest U.S. lender to do so.
Citigroup’s overdraft fee collection has been among the lowest among its peers. Along with a consumer-friendly overdraft policy, the major bank continues to expand access to banking products and services, making banking more financially inclusive for underserved communities.
At the beginning of February, M&T Bank (MTB – Free Report) announced the removal of insufficient funds fees and overdraft protection transfer fees from a linked deposit account.
MTB will also reduce the overdraft fee to $15 and limit daily fee assessment to once per day. The changes should be effective from the second quarter of 2022.