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The WSJ reports that JP Morgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) are taking steps to lessen the costs of overdraft protection for their customers.

Both banks publicly insist their actions are a function of the economic environment rather than the political one, which I suppose they feel they must, but the reality is that these are PR baby steps that likely come too late to stave off much more significant government constraints on overdraft programs.

Bank of America is waiving fees on overdrafts of under $10, and JP Morgan Chase is waiving them on overdrafts of $5 or less. These moves will benefit some consumers, but it is transparently clear that the real motivation behind the changes is to stave off media reports of $35 overdraft fees being applied to customers buying a pack of gum or can of soda.

In fairness, these two banks have some of the more responsible overdraft policies in the industry, and so stand to attract attention on this issue and be unfairly tarred with the same brush as banks that treat overdraft as a way to hustle customers rather than serve them. Any outrage is better directed at other institutions.

Still, these moves are too little and too late to stave off more dramatic government action, which may well spell the end of the "free checking" business model that became so widespread in the past decade.

No positions.

Source: Banks' Overdraft Actions: Too Little, Too Late