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Bank of America says it will cut overdraft fees this year.

Bank of America will reduce — but not eliminate — overdraft fees for its 63 million retail customers, the biggest step by a major bank to dial back the pricey penalties, which have drawn increased scrutiny from regulators.

In May, the bank, the country’s second-biggest, will cut its fee for overdraft services to $10 from $35, it said in a statement. That fee is charged when a transaction exceeds the account’s balance and the bank covers it, allowing the payment to go through. It also will eliminate a $12 fee for transfers from linked accounts to an overdrawn account.

Starting next month, Bank of America will do away with fees for nonsufficient funds, such as when a check bounces, and will stop customers from being able to overdraw their accounts at A.T.M.s.

Some customers still want occasional access to overdraft services, Holly O’Neill, the president of retail banking at Bank of America, said in an interview Tuesday. “Just eliminating or stopping clients from using overdraft is not the solution, so that’s really why we are continuing to retain access to our clients to overdraft at a much lower fee,” she said.

Banking regulators have taken aim at overdraft practices in recent months. Rohit Chopra, the director of the Consumer Financial Protection Bureau, has said many lenders have become “hooked on overdraft fees” to feed their profits. The acting comptroller of the currency, Michael J. Hsu, has said the charges disproportionately affect vulnerable customers.

Bank of America’s plan is the most aggressive among the biggest banks, but smaller banks have gone further: Capital One and Ally Financial eliminated fees for overdrafting last year. Some lenders have introduced less-punitive alternatives to the fees, like grace periods or small short-term loans.

JPMorgan Chase, the country’s largest bank, said last month that it planned to give overdrawn customers an extra business day to raise their balances to within the $50 “overdraft cushion” that prevents fees from being charged. Even before Tuesday’s announcement, Bank of America was offering strapped customers loans of up to $500 that must be repaid over three months.

“This is a very strong program that creates both limits, guardrails and the supports that people need to get through cash crunches that are going to continue to come to many working families,” Mike Calhoun, the president of the Center for Responsible Lending, an advocacy group that promotes financial fairness, said in an interview.

The nonprofit, which was among the community groups consulted by Bank of America on the new policies, has urged all financial institutions to eliminate overdraft fees.

“Families of color are more likely to be hit with overdraft fees, even though they are less likely to have bank accounts than other customers,” he said. Because overdraft fees are a leading cause of involuntary account closures, minorities are more at risk of being pushed out of the mainstream financial system, he added.

The U.S. banking industry’s revenue from overdraft and nonsufficient funds was $15.47 billion in 2019, according to a December estimate from the consumer bureau. JPMorgan Chase, Wells Fargo, and Bank of America brought in 44 percent of the fees that year among banks with assets of more than $1 billion, the bureau said.

Bank of America declined to say how much it makes from overdraft fees. Ms. O’Neill said overdraft fees account for less than 1 percent of its total revenue, but said the changes would reduce its overdraft fee revenues “by hundreds of millions of dollars.” In the third quarter, the bank’s total revenue was $22.8 billion.

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