Wells Fargo launched a new no-overdraft fee bank account Tuesday, ahead of schedule. The Clear Access Banking account is one of two limited-overdraft-fee products the country's fourth-largest bank announced in March, and originally said would be available in early 2021.
The launch of the checkless account is part of Wells Fargo's broader effort to simplify its products and services and replaces two existing accounts, Teen Checking and Opportunity Checking, said Erin Constantine, Wells Fargo's head of consumer deposits for consumer and small business banking. The account has a $5 monthly fee, which is waived for primary account owners under age 25.
"When we decided that we were going to try to deliver for our customers this year, everything started falling into place," Constantine said. "We're excited that we were able to launch this so much quicker than we had originally anticipated."
Wells Fargo's launch of a no-overdraft-fee account comes as lawmakers have called on banks to waive overdraft fees amid the coronavirus pandemic.
Senators Cory Booker, D-N.J., and Sherrod Brown, D-Ohio, introduced a bill in March that would bar financial institutions from charging overdraft fees until the crisis is over.
Wells Fargo is also struggling to repair its image since its widespread consumer abuses stemming from its fake accounts scandal first came to light in 2016.
The lender's overdraft practices came under scrutiny last year after a report by The New York Times revealed a policy that allowed the bank's accounts to remain open even after customers thought they had closed them, prompting some customers to be charged thousands of dollars in overdraft fees.
Wells Fargo's new account could be an attempt to show the public it is implementing positive change in a banking practice that is often criticized by lawmakers and consumer groups.
"The fast pace of the improvements we're making is evident in our roll out of Clear Access Banking, well ahead of our original target date of early next year," Ed Kadletz, head of Wells Fargo's deposit products group for consumer and small business banking, said in a statement. "These updates are supporting Wells Fargo's larger transformation and focus on earning trust and building lifelong relationships with our customers."
"We're definitely anticipating that we will bring new customers to Wells Fargo, having a simple, straightforward account like this with a low monthly service fee and no overdraft," Constantine said. "It's certainly something that a lot of customers are looking for."
Challenger banks have also embraced no-overdraft offerings.
Chime's SpotMe feature covers customers who overdraw as much as $100 past the amount in their account, while Varo Money, which recently obtained its national bank charter, covers transactions up to $50 over a user's account balance.
Varo claims it has saved customers more than $100 million in overdraft fees during the past year.