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New York Community (NYCB) to Scrap NSF Fees & Launch Early Pay

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Joining the industry trend of doing away with some “junk fees”, New York Community Bancorp, Inc. (NYCB - Free Report) announced that it would remove non-sufficient fund fees ("NSF") and certain other fees on all of its consumer and business checking products starting Aug 1, 2022.

Along with NSF, the company will eliminate uncollected and unavailable funds fees, and transfer fees on its overdraft shield product.

Recently, NYCB introduced the My Community SimplyOne Checking Account, a Bank On certified product with features like no NSF or overdraft fees. It also has low minimum opening deposit requirements, and access to both online banking and mobile banking with remote deposit.

The company announced plans to launch Early Pay in the third quarter to help customers with their cash flow needs. This offers customers access to direct deposit paycheck up to two days sooner, helping them avoid overdrafts and better manage spending.

Management noted, "the elimination of these fees and the introduction of Early Pay is another step in helping our customers better manage their finances."

In late May, New York Community and Flagstar Bancorp announced the extension of their merger to Oct 31, 2022. NYCB and FBC also amended their merger agreement to include the decision that the combined company's ongoing banking operations will be carried out under a national bank charter instead of a state bank charter.

The companies are waiting to obtain necessary approvals from the Federal Reserve Board and the Office of the Comptroller of the Currency for the amended merger agreement.

Shares of NYCB have lost 12% over the past three months, wider than the industry’s decline of 6.5%.

 

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New York Community carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NYCB joined a growing bandwagon of lenders that 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 issuing guidance to curb banks' reliance on fees from overdraft and non-sufficient fund facilities.

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 were scheduled to be effective from second-quarter 2022.

Citigroup Inc. (C - Free Report) also announced that it would 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, C continues to expand access to banking products and services, making banking more financially inclusive for the underserved communities.


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