Citibank Taking Steps to Minimize Overdraft Fees

FOXBusiness

In an effort to minimize the potential for multiple overdraft charges, Citibank will soon start clearing smaller checks ahead of larger ones, a method opposite those typically used by large banks.

In an internal memo on Monday, the consumer banking arm of Citigroup (NYSE:C) said it will start the new process, which differs from many other large banks that typically process the biggest checks first, on July 25, according to the Associated Press.

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Customers will likely be notified of the change, which only affects consumer checks, in statements issued next week. As of right now, the overdraft fee is $34 per violation at Citi.

The move comes as criticism continues to mount around overdraft programs in the banking industry.

A new regulation went into effect last year that requires financial institutions to obtain consent from customers before enrolling them in overdraft protection for debit transaction. Banks, however, can still automatically enroll customers in overdraft protection for checks and automatic payments.