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Hancock Whitney (HWC) to Get Rid of NSF, Overdraft Fees by '22
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Hancock Whitney Corporation’s (HWC - Free Report) banking subsidiary, Hancock Whitney Bank, becomes the latest one to underline plans for eliminating consumer non-sufficient funds (NSF) fees and certain overdraft (OD) fees by the end of this year.
Particularly, the company will remove all NSF fees, certain OD protection transfer fees and sustained OD fees. HWC will also increase to its existing OD balance threshold, offering clients a higher cushion before fees are assessed.
The elimination of the NSF and certain OD fees will likely dent the company’s fee income, with management expecting service charges on deposit accounts to reduce $10-$11 million every year.
Additionally, to aid customers in better steering their financial lives, the company will modify other consumer checking account features and products.
Earlier this month, Hancock Whitney launched Early Pay. The feature is available with any Hancock Whitney consumer checking or savings account. It gives customers access to their direct-deposited payroll up to two days earlier, and helps them manage their spending, liquidity needs and avoid overdrafts.
Aside from this, Hancock Whitney will offer a checking product, Assure Checking, which is a new no-overdraft fee account. The account will enable customers to avoid overdrafts and overdraft-related fees. It will be part of a larger suite of deposit products launching later this year to help consumers avoid payday lenders.
The rolling out of the latest offerings is a commendable move by the bank to retain consumers and bring in new ones. While a decline in service charges on deposit accounts will likely be a hindrance, HWC has ample scope to improve the top line from other avenues. Going forward, robust economic growth and a gradual rise in demand for loans will support revenues. Also, its strategic investments in growth and new markets are expected to aid.
Shares of HWC have gained 7.1% over the past three months against the industry’s decline of 1.9%.
HWC has joined a growing bandwagon of lenders that have eased unpopular charges amid the growing regulatory scrutiny. In May 2021, the U.S. Senate criticized the practice during the pandemic. In December 2021, the U.S. Consumer Financial Protection Bureau noted it was exploring to issue new guidance aimed at curbing banks' reliance on fees from overdraft and non-sufficient funds facilities. Banks raked in $69 billion in third-quarter 2021 from such charges.
Citigroup Inc. (C - Free Report) will completely terminate 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. Other than a consumer-friendly overdraft policy, the big bank continues to expand access to banking products and services, making banking more financially inclusive for underserved communities.
In early February, M&T Bank (MTB - Free Report) announced the removal of non-sufficient fund fees and an overdraft protection transfer charge from a linked deposit account.
MTB will also diminish overdraft fees to $15 and limit daily fee assessment to once per day. The alterations are scheduled to be effective from second-quarter 2022.
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Hancock Whitney (HWC) to Get Rid of NSF, Overdraft Fees by '22
Hancock Whitney Corporation’s (HWC - Free Report) banking subsidiary, Hancock Whitney Bank, becomes the latest one to underline plans for eliminating consumer non-sufficient funds (NSF) fees and certain overdraft (OD) fees by the end of this year.
Particularly, the company will remove all NSF fees, certain OD protection transfer fees and sustained OD fees. HWC will also increase to its existing OD balance threshold, offering clients a higher cushion before fees are assessed.
The elimination of the NSF and certain OD fees will likely dent the company’s fee income, with management expecting service charges on deposit accounts to reduce $10-$11 million every year.
Additionally, to aid customers in better steering their financial lives, the company will modify other consumer checking account features and products.
Earlier this month, Hancock Whitney launched Early Pay. The feature is available with any Hancock Whitney consumer checking or savings account. It gives customers access to their direct-deposited payroll up to two days earlier, and helps them manage their spending, liquidity needs and avoid overdrafts.
Aside from this, Hancock Whitney will offer a checking product, Assure Checking, which is a new no-overdraft fee account. The account will enable customers to avoid overdrafts and overdraft-related fees. It will be part of a larger suite of deposit products launching later this year to help consumers avoid payday lenders.
The rolling out of the latest offerings is a commendable move by the bank to retain consumers and bring in new ones. While a decline in service charges on deposit accounts will likely be a hindrance, HWC has ample scope to improve the top line from other avenues. Going forward, robust economic growth and a gradual rise in demand for loans will support revenues. Also, its strategic investments in growth and new markets are expected to aid.
Shares of HWC have gained 7.1% over the past three months against the industry’s decline of 1.9%.
Image Source: Zacks Investment Research
The company carries a Zacks Rank #2 (Buy) at present. You can see the complete 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 the growing regulatory scrutiny. In May 2021, the U.S. Senate criticized the practice during the pandemic. In December 2021, the U.S. Consumer Financial Protection Bureau noted it was exploring to issue new guidance aimed at curbing banks' reliance on fees from overdraft and non-sufficient funds facilities. Banks raked in $69 billion in third-quarter 2021 from such charges.
Citigroup Inc. (C - Free Report) will completely terminate 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. Other than a consumer-friendly overdraft policy, the big bank continues to expand access to banking products and services, making banking more financially inclusive for underserved communities.
In early February, M&T Bank (MTB - Free Report) announced the removal of non-sufficient fund fees and an overdraft protection transfer charge from a linked deposit account.
MTB will also diminish overdraft fees to $15 and limit daily fee assessment to once per day. The alterations are scheduled to be effective from second-quarter 2022.