No More Overdrafts from Bank of America (BAC, C)

In hopes of preempting new credit card regulations, Bank of America (NYSE: BAC) announced that it will change the way debit cards operate with overdrafts. Previously, if a customer tried to make a debit card purchase greater than what is in their account, the transaction would be processed and a $35 overdraft fee would be assessed. Under the new rules, the transaction would be blocked from happening in the first place, thus circumventing additional fees and indebtedness to the bank.

This new policy will roll out for new Bank of America debit card holders on June 19th, and existing customers in August. Citigroup Inc. (NYSE: C) already has a similar policy in place to help mitigate overdraft fees.

Overdraft fees are a major sourse of revenue for these banks. It will be interesting to see how these new policies will effect their bottom lines. Bank of America is up 2% today to $17.14 per share, and Citigroup is up 3.8% to $3.96.