DCA Member Bank of America Cuts Overdraft Fees
Bank of America will reduce overdraft fees from $35 to $10. The move by DCA member BOA was made to provide relief to customers least able to afford overdraft fees. BOA, the second-largest bank in the US, also announced it would eliminate nonsufficient-funds fees next month and transfer fees for overdraft protection in May.
BOA should be commended for the move to drop bank fees that disproportionately impact low-income customers, including Black and Latino Americans. This move will provide cash-strapped families with much-needed relief and help set a new tone in the industry for fairness and inclusion.
Credit Reports to Include Buy Now Pay Later Info
Installment plans are growing in popularity. In response, Equifax announced it will include info about pay-in-4 plans in its credit reports to provide lenders with a more complete picture of consumers’ financial commitments.
Increasingly, retailers offer buy-now-pay-later as a purchase incentive, giving consumers the option to make four payments over time at checkout online and in stores. Offered by Afterpay Ltd., Klarna Bank and others, the payment plans until now haven’t been reflected in credit reports. For responsible consumers with thin credit files or short credit history, this is a smart way to affordably finance purchases—and boost credit scores to enable more borrowing power.
Cryptocurrency Lenders To Check Credit Reports
Consumers are now able to provide blockchain companies access to their personal credit scores through the security firm Spring Labs. Specifically, DCA members TransUnion and VantageScore will provide scores to allow cryptocurrency investors to borrow based on their creditworthiness.
This move opens up new opportunities for consumers. The ability for lenders to check a borrower’s creditworthiness may result in borrowers receiving loans under better terms than they could otherwise get, i.e. without requiring collateral. By providing credit and identity data on the blockchain, more consumers will be able to participate in the crypto market while remaining compliant with regulators.
Banks Make It Easier To Get A Credit Card
Almost 30 million credit cards were issued to people with credit scores of 660 and below in 2021, a signal that the US economy (and Americans’ finances) is strong, according to DCA member and credit reporting firm TransUnion. About 33% of banks reported easing credit standards during the fourth quarter of last year, compared with 4% during the same time period the previous year.
In early 2020 lenders fearing missed payments in the economic upheaval of the pandemic tightened loan approval standards. Riskier borrowers were locked out of credit market. But, stimulus payments and expanded unemployment benefits helped to lower balances—and limit payment defaults.