Aimed at providing financial security to clients, Bank of America’s Balance Assist program allows its customers to borrow up to the maximum of $500 for a flat fee of $5 regardless of the total amount of funds headed to the account. Customers can borrow in increments of $100, and repayments will be made in three equal monthly installments over a 90-day period.
Balance Assist is currently scheduled to launch in January 2021 in select states, and will roll out into remaining states throughout early 2021.
“Balance Assist is the latest in a powerful set of transparent, easy-to-use solutions to help our clients budget, save, spend and borrow carefully and confidently,” said D. Steve Boland, president of retail at Bank of America. “People want the power to achieve financial freedom and stability, and are seeking simple, clear solutions and advice to help them along the way.”
Customers will be deemed eligible for Balance Assist if they have a qualified checking account open with Bank of America for at least one year, have a current positive balance in all Bank of America checking accounts, do not already have an open Balance Assist and have not had another Balance Assist within 30 days of applying.
Bank of America introduced Balance Assist as a way to meet consumer need for liquidity, Kevin Condon, senior vice president for consumer-deposit and small-business products at Bank of America, told American Banker.
“Customers have told us they have that need for liquidity,” Condon said. “We want them to stay within mainstream banking to do that.”
Several governmental agencies - the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System – pushed big banks earlier this year to begin offering small-dollar loans in response to the economic effects of COVID-19. The agencies stressed that existing regulatory framework allows for banks to offer responsible small-dollar loans and that they would be better suited to do so over payday lenders.
“The agencies recognize the important role that responsibly offered small-dollar loans can play in helping customers meet their needs for credit due to temporary cash-flow imbalances, unexpected expenses, or income shortfalls during periods of economic stress or disaster recoveries,” the joint letter said.
Bank of America said that Balance Assist becomes the latest in its lineup of smart financial solutions for customers, which also includes SafeBalance, a type of account that has no overdraft fee; Keep The Change, which automatically deposits change from rounded-up debit card transactions into a savings account; and Secured Card, a credit card that allows clients to strengthen or rebuild credit with a security deposit of $300.
“We continue to develop a variety of innovative solutions to help our clients achieve solid financial footing,” said April Schneider, head of Consumer and Small Business Products at Bank of America. “Solutions like Balance Assist, SafeBalance and Secured Card help provide clients with financial stability, and can put them on a path to longer-term financial wellness.”