In a move that’s been long awaited by many Rhode Islanders, Navigant Credit Union has finally revamped its overdraft policies, bringing them more in line with other financial institutions in the area. This shift marks a significant change for the locally-owned credit union, which has been a favorite among Rhode Island residents due to its deep community roots.

For years, Navigant’s overdraft fees were among the most punitive in the state, with a flat $34 charge regardless of the transaction amount. This policy hit hardest those who could least afford it – customers living paycheck to paycheck or struggling with unexpected expenses. Now, in a welcome change, Navigant has introduced a tiered system that significantly reduces or eliminates fees for smaller overdrafts.

Under the new policy, Navigant will no longer charge any fee for returned items or for overdrafts of less than $10. For transactions between $10 and $99.99 that overdraw an account, the fee has been reduced to $10. Only overdrafts of $100 or more will incur the higher fee of $20, which is still a substantial reduction from the previous $34 charge.

This change brings Navigant more in line with its competitors in the Rhode Island banking landscape. For instance, Citizens Bank implemented a $5 “Overdraft Pass” some time ago, waiving fees for overdrafts of $5 or less. Similarly, Washington Trust doesn’t charge fees for overdrafts less than $24.99.

However, Navigant’s new policy still lacks some of the more customer-friendly features offered by other banks. TD Bank, for example, provides a grace period until 11 PM ET the next business day for customers to rectify overdrafts without incurring fees. Citizens Bank offers a similar feature called “Citizens Peace of Mind,” giving customers until 10 PM ET the next business day to cover overdrafts.

Bank of America has gone even further, eliminating overdraft fees on everyday non-recurring debit card transactions and ATM withdrawals. They also don’t charge fees on items that overdraw an account by $1 or less.

Coastal 1 Credit Union, another local competitor, has implemented a tiered fee structure for ATM and everyday debit card overdrafts, with fees ranging from $7.50 to $35 depending on the transaction amount.

Santander Bank has perhaps the most lenient policy, charging no fees for returned items or for transactions paid against unavailable funds. They only charge a $15 fee when an item is paid that causes the account to be overdrawn by more than $100.

While Navigant’s new policy is a significant improvement, it’s worth noting that they still lack features like same-day deposit coverage for overdrafts, which some banks offer. This means that Navigant customers who realize they’ve overdrawn their account may not be able to avoid fees by making an immediate deposit, unlike customers at some other institutions.

Despite these limitations, the change represents a major shift for Navigant. The credit union has long been praised for its commitment to the local community and its member-owned structure, which theoretically prioritizes customer benefit over profit. However, its overdraft policies had been a glaring exception to this customer-first approach.

The revision of these policies suggests that Navigant is listening to its members and responding to competitive pressures in the banking industry. It’s a move that aligns more closely with the credit union’s stated mission of serving the financial needs of Rhode Islanders.

This change comes at a time when overdraft fees are under increased scrutiny nationwide. Consumer advocates have long argued that these fees disproportionately affect low-income customers and can trap people in cycles of debt. In response, many banks and credit unions have been revising their policies, either reducing fees or introducing more flexible terms.

For Navigant customers, particularly those who occasionally find themselves short on funds, this change could mean significant savings. A customer who might have previously incurred a $34 fee for overdrawing their account by $15 will now only be charged $10. For many Rhode Islanders living on tight budgets, this $24 difference could mean the difference between buying groceries or going hungry.

While Navigant’s new policy is a step in the right direction, it’s clear that there’s still room for improvement. As other financial institutions continue to innovate and compete on customer-friendly policies, Navigant may need to consider further changes to stay competitive.

Nevertheless, this move demonstrates Navigant’s willingness to evolve and adapt to better serve its members. It’s a reminder of the value that local, member-owned financial institutions can bring to a community when they truly listen to and act on the needs of their customers.

For Rhode Islanders who have stuck with Navigant despite its previously harsh overdraft policies, this change comes as a welcome relief. It’s a sign that their loyalty to this local institution hasn’t been misplaced, and that Navigant is committed to balancing its financial health with the wellbeing of its members.

As the banking landscape continues to evolve, it will be interesting to see how Navigant and other local financial institutions adapt. In the end, Navigant’s move serves as a reminder of the power of consumer advocacy and market competition. As customers continue to demand fairer practices from their financial institutions, we may see even more positive changes in the future.