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April 11, 2022

On the web

Bank Deposits Could Drop for First Time Since World War II

Wall Street Journal

“U.S. banks have a streak of increasing deposits as a group every year since at least World War II. This year could break it. Over the past two months, bank analysts have slashed their expectations for deposit levels at the biggest banks. The 24 institutions that make up the benchmark KBW Nasdaq Bank Index are now expected to see a 6% decline in deposits this year. Those 24 banks account for nearly 60% of what was $19 trillion in deposits in December, according to the Federal Deposit Insurance Corp.”

March 2, 2022

On the web

Goldman Sachs Advances Further Into Embedded Finance With GM Partnership

American Banker

“Goldman Sachs is moving forward with its embedded finance strategy. Its recent deal with General Motors is the latest step. Goldman took over issuing the General Motors’ My GM Rewards card from Capital One; it converted the 3 million GM Rewards cardholders to its consumer business, Marcus, in late February. Today, these customers use the Marcus app to manage their card online. But in the future, the bank and the car company will partner to develop a new digital environment for GM car owners to access the card and possibly other banking products.”

February 24, 2022

On the web

Citi Poised to Become Largest Bank to Eliminate Overdraft Fees

American Banker

“Citigroup is poised to become the largest U.S. bank to eliminate overdraft fees entirely. The New York megabank said Thursday that it plans to discontinue the controversial fees, along with two related charges, by this summer. Citi currently charges customers $34 when they overdraw their accounts. The action is part of Citi’s ongoing efforts to “make the financial system easier and more equitable for communities who have little or no financial buffer,” Gonzalo Luchetti, Citi’s CEO of US Personal Banking, said in a press release.”

January 12, 2022

On the web

January 11, 2022

On the web

Bank of America Slashes Fees for Account Overdrafts | AP News


“Bank of America is slashing the amount it charges customers when they spend more than they have in their accounts and plans to eliminate entirely its fees for bounced checks. It’s the latest move by the nation’s biggest banks to roll back the overdraft fees they long charged customers, fees that often amount to hundreds of dollars a year for frequent overdraft users. The bank based in Charlotte, North Carolina, will cut the overdraft fees it charges customers to $10 from $35 starting in May.”

January 4, 2022

On the web

US banks move away from overdraft fees in a win for consumers


“As US shoppers count the cost of their last-minute holiday purchases, there is one thing they have to worry about a little less in 2022: overdraft fees. Consumer advocates said last year saw the most significant rollbacks and adjustments to how banks charge customers when their debit accounts fall below zero. Those fees “may be the single most unpopular thing banks do to their customers”, said Jesse Van Tol, chief executive of the National Community Reinvestment Coalition, a consumer advocacy group. “I think you’re just really seeing a tipping point this year.””

December 9, 2021

On the wires

Chase Helps More Than Two Million Customers Avoid Overdraft Service Fees

“Increasing the cushion to $50 from $5 has helped many Chase customers who didn’t expect a check or electronic payment to post, or just don’t have enough money in their checking account. Customers value access to overdraft services so that they can avoid late fees when making payments on important bills like utilities and rent, avoid negative impacts to their credit score, and can continue making every day purchases like groceries with debit card coverage. And now with the $50 cushion, they can continue to have access to the service without incurring overdraft service fees as long as their account isn’t more than $50 overdrawn at the end of the business day.”

December 1, 2021

On the web

Capital One Says It Is Ditching All Consumer Overdraft Fees, Giving up $150 Million in Annual Revenue


Capital One says it is eliminating all overdraft fees for retail banking customers. It’s the largest U.S. bank yet to end the industry practice of charging customers a hefty fee, typically $25 to $35 each instance, for allowing transactions that exceed a customer’s balance, according to the McLean, Virginia-based lender.   The move will cost the bank an estimated $150 million in lost revenue per year, according to a company spokesperson.”

September 29, 2021

On the web

Bank Mergers Are On Track to Hit Their Highest Level Since the Financial Crisis

Wall Street Journal

“It is a sharp turnaround from last year, when the economy spiraled and many regional and community banks put merger plans on the shelf. Now, bank executives are feeling more certain about what the future holds, but some are finding it hard to make it on their own. Though the economy has in many ways recovered from 2020, loan demand is still low and profits from lending are slim.”

August 26, 2021

On the web

Overdraft Fees Jump 40% YOY but Still Headed Lower From 2019 Levels


“Overdraft fees are rebounding, but remain well below 2019 levels as competitive and political pressures have many banks offering low-fee accounts. Banks booked $1.97 billion of overdraft fees in the second quarter, a 39.5% increase from the year-ago period. But fees are still 32.8% below the amount recorded in the 2019 second quarter. Overdraft fees were cut in half over the first six months of 2020 as the pandemic forced business closures that curtailed consumer spending. While lockdowns have eased and economic growth has rebounded this year, banks are facing political and competitive pressure to move away from overdraft. Several banks have recently announced no-overdraft accounts or plans to unroll such accounts in the near term.”

July 19, 2021

On the web

US banks ramp up spending on pay and technology


“Costs at the top US banks jumped more than $6.6bn in the most recent quarter, as the intensifying battle for talent and the growing threat from new fintech rivals forced executives to step up spending.  The 10 per cent increase in costs compared with last year at JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup surprised analysts. Many had predicted that expenses would fall modestly this year as the extra spending associated with doing business during the pandemic faded away. However, on a series of conference calls to discuss quarterly earnings, executives forecast higher annual expenses due to pay increases for bankers and bigger investments in technology and marketing.”

July 7, 2021

On the web

These 10 Banks Are Rethinking Overdraft Fees. Here’s Why and How.

American Banker

“The recent changes, which are being led by regional banks, range from eliminating overdraft fees altogether to introducing new products that will offer less expensive options to customers who live paycheck to paycheck. These moves could be bellwethers for an industry that is under pressure to change . They are coming as overdraft-free startups continue to lure customers away from traditional banks. They are also occurring at a time when Biden administration officials — and particularly the new leadership at the Consumer Financial Protection Bureau — are expected to take a tougher stance on overdraft fees.”

June 23, 2021

On the web

Banks Slowly Offer Alternatives to Overdraft Fees, a Bane of Struggling Spenders

The New York Times

“Overdraft fees, initially marketed as a convenience , have proliferated in the past quarter-century. Rather than bouncing a check or other payment, these programs reassure customers that a bill won’t go unpaid or an emergency purchase won’t be denied — even though they can turn a $3 coffee into a $38 extravagance. Since then, overdraft protections have become known as an aggressive way to siphon fees from consumers. Although customers must opt in to overdraft protections for debit or A.T.M. withdrawals, banks don’t need their permission to charge fees for online payments or checks instead of letting them bounce. All told, overdraft fees are worth billions of dollars to banks each year. The charges were so lucrative to one midsize institution that its chief executive once named his boat after them.”

June 16, 2021

On the web

Two More Regional Banks Are Rethinking Overdraft Fees

American Banker

“Regions Financial and Citizens Financial Group are rethinking their overdraft policies after other regional banks took steps to deemphasize or eliminate the revenue generated from customers who spend more money than they have. The two banks do not plan to stop charging overdraft fees, but executives with both firms said Tuesday that they expect those fees to continue to decline — in part due to policy changes that the banks plan to make.”

June 4, 2021

On the wires

U.S. Bank Launches Industry-leading Video Banking Options for Customers

“U.S. Bank has launched an enhancement to our popular cobrowse feature: live video of the banker – a first in the industry. Cobrowse allows customers to share their screen with a banker so they can view and navigate online and mobile banking together, particularly helpful for those times when you need spur-of-the-moment guidance.  And now, branch bankers can appear on one-way video while cobrowsing so customers can see who is helping them – enhancing the interaction and making it feel more personal. Customers have also told us being able to see who they are talking to on video is reassuring and gives a greater sense of security.”

June 2, 2021

On the wires

Ally Bank Eliminates All Overdraft Fees, Ending Centuries-old Industry Practice and Lifting Consumer Burden

“Ally Bank, the largest digital bank in the U.S. and a division of Ally Financial Inc. (NYSE: ALLY ), eliminated overdraft fees on all accounts today. Every Ally Bank customer is eligible, and there are no requirements or restrictions. Ally Financial CEO Jeffrey Brown said: “This is a significant advancement for consumers as we live out our mission and live up to our name – being a true ally. Overdraft fees are a pain point for many consumers but are particularly onerous for some. It is time to end them.”

May 27, 2021

On the web

HSBC Exits Loss-making U.S. Retail Banking As Part of Asia Pivot


“HSBC (HSBA.L) announced it is withdrawing from U.S. mass market retail banking by selling some parts of the money-losing business and winding down others, a long-awaited move as the lender steps up a shift in focus to Asia, its biggest market. Europe’s biggest bank has for years been trying to shrink its presence in some European and North American markets where it has struggled against competition from larger domestic players. The bank said in a statement late on Wednesday it would exit retail banking for most individual and small business customers but retain a small physical presence in the United States to serve its international affluent and very wealthy clients.”

May 21, 2021

On the web

Santander to Pump up Payments Business in Bid to Boost Valuation


“Santander (SAN.MC) expects to triple revenues in its payments business PagoNxt to around 1 billion euros ($1.2 billion) in the next few years as it moves to compete with major players in the business such as Apple Pay and Stripe. Spain’s biggest bank is targeting payments as part of a wider strategy to boost its market valuation, with its traditional lending business stymied by low interest rates and technology firms moving in on other areas of financial services…Santander grouped its consumer, merchant and trade payments businesses into “PagoNxt” in September in an attempt to build a financial technology brand distinct from its banking core.”

Truist, Varo Join Effort to Bolster Americans’ Emergency Savings

American Banker

“Truist Financial and the digital-only bank Varo have joined a philanthropic initiative from the asset management giant BlackRock aimed at helping Americans build more emergency savings. The two companies are the first banks to sign onto the effort, which is working to build new and easier-to-use tools that will allow more people to establish financial safety nets.”

May 10, 2021

On the web

Simple Bank Shutdown Goes Awry Leaving Customers Without Account Access

The Verge

“The online bank Simple shut down on Saturday and was supposed to seamlessly transition customers’ accounts over to its parent company, BBVA. But instead, many users found themselves unable to access their bank account at all, as BBVA’s website returned an assortment of error messages, from “system error” to warnings that their account information was mismatched. The transition has gone so poorly that BBVA’s US website now opens on a large red banner warning users of extended customer service wait times. Anyone who visits the Simple transition page will see a different red banner, apologizing for the issues.”

Fifth Third Joins List of Banks Offering Low-cost Deposit Accounts

American Banker

“Fifth Third Bancorp in Cincinnati has begun offering low-cost deposit accounts aimed at helping retail customers avoid overdraft fees and access their paychecks sooner. The $207 billion-asset Fifth Third will give customers extra time to replenish balances before an overdraft penalty is charged, post direct deposit payroll funds earlier than before and make advances against future direct deposits for a fee. It will also charge no monthly maintenance fee for the Momentum Banking checking or savings products.”

April 16, 2021

On the web

House Bill Aims to Encourage More De Novo Banks

American Banker

“Rep. Andy Barr, R-Ky., has introduced legislation aimed at making it easier for new community banks to open in areas that are underserved by the banking system. The Promoting Access to Capital in Underbanked Communities Act would encourage the formation of new banks in locations where bank branches are scarce. It would give de novo banks more time to meet capital requirements and would ease other regulatory burdens on new community financial institutions.”

April 13, 2021

On the wires

PNC Launches Low Cash Mode(SM) To Address $17 Billion In Industry Overdraft Fees

“Addressing the $17 billion that some studies estimate U.S. consumers pay each year in overdraft fees, The PNC Financial Services Group, Inc. (NYSE: PNC ) today announced its groundbreaking new Low Cash Mode℠ digital offering that is expected to help Virtual Wallet® customers avoid overdraft fees through unprecedented account transparency and control to manage through low-cash moments or mis-timed payments. “Low Cash Mode gives our customers the ability to avoid unnecessary overdraft fees. With this new tool, we’re able to shift away from the industry’s widely used overdraft approach, which we believe is unsustainable,” said William S. Demchak, PNC’s chairman, president and chief executive officer.”

April 5, 2021

On the web

Brazil’s biggest banks battle for reinvention in digital era


“The five giants that tower over the country’s financial system — Itaú, Bradesco and Santander Brasil, along with state-controlled Banco do Brasil and Caixa Econômica Federal — have in recent years embarked on investments in technology in a bid to stop customers switching to challengers such as Nubank, Brazil’s internet banking unicorn. Since the start of the coronavirus crisis, many have also deepened cost-cutting measures, with branch closures and redundancies. The need for reform is more urgent than ever with the pandemic having hastened the pace of digital change.”

March 29, 2021

On the web

PNC Launches Checking Account for Underbanked That Limits Fees


PNC Financial Services Group Inc. launched a bank account that limits fees to help consumers facing financial pressures worsened by the pandemic maintain their access to banking services. The checking account, which has no charges for overdrafts or insufficient funds, will cost $5 a month, a company spokesperson said. It’s designed to hold on to customers struggling to pay loans or fees, according to Chief Executive Officer Bill Demchak.”

February 23, 2021

On the wires

BBVA and Google Cloud Form Strategic Partnership to Drive Security Innovation in Financial Services

“BBVA and Google Cloud today announced a new strategic partnership to transform the bank’s security strategy by optimizing and improving its security infrastructure. As part of this global agreement, BBVA will collaborate with Google Cloud in the development of groundbreaking new artificial intelligence (AI) and machine learning (ML) models to predict and prevent cyberattacks against its banking infrastructure, providing a more secure experience for the bank and its customers.”

February 22, 2021

On the web

February 4, 2021

On the web

Community Bank Enlists Coinbase, SAP to Offer Crypto

American Banker

“Vast Bank now lets customers buy cryptocurrency from their bank accounts — a feature more commonly associated with third-party payment apps like PayPal and Square . Through a partnership with Coinbase, the community bank, which is based in Tulsa, Okla., and has $744 million of assets, is joining a handful of others that are seeking to meet the needs of customers who are interested in buying cryptocurrency through a regulated institution.”

January 11, 2021

On the web

Goldman Sachs Eyes Growth in Cash Management Technology

Financial Times

“For more than five years Goldman Sachs has been recasting itself as a technology company as well as a bank, so it is little surprise that Stephen Scherr, chief financial officer, sees tech as core to his professional objectives. For Mr Scherr, head of Goldman’s fledgling consumer bank until late 2018, there are two main strands: tech that can make the bank more profitable and efficient, and tech that makes his finance office run better.”

January 4, 2021

On the web

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