Nationwide’s 39% overdraft interest is ‘taking advantage’ of fees ban

It is a totally disproportionate charge at a time when savings rates are below 2%

Nationwide, my current account provider, states that as a result of the recent Financial Conduct Authority ban on overdraft fees from April 2020, all overdrafts on its current accounts will be charged a single fixed rate of 39.9% EAR/APR (variable) from 11 November 2019. Is this going to be the same for all banks and building societies? If so, it seems the sector is taking advantage of the ruling to introduce iniquitous and totally disproportionate rates in the face of savings rates below 2% and inflation below 3%.
MD, London

You can be certain Nationwide will be the first of many to seek to minimise the impact of the new requirement. In 2017 banks made 2.4bn from overdrafts and fees - some unarranged loans are 10 times more than those charged by payday lenders. The FCA acted to make overdrafts simpler and easier to compare rather than to cap charges, despite concluding many were "disproportionately high". It also ruled that banks would not impose higher rates on some customers.