The bank industry's signs of retreat on account fees may not satisfy Washington lawmakers, some of whom say they're pushing ahead with broad restrictions on fee policies at banks.

Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM), the two largest U.S. by assets, said this week they are reducing overdraft fees. Wells Fargo & Co. (WFC) said it will eliminate fees charged on overdrafts of $5 or less and impose no more than four overdraft fees per day. Regional banks Toronto-Dominion Bank (TD), PNC Financial Services Group Inc. (PNC) and Fifth Third Bancorp (FITB), are also planning to change some of the ways they charge fees.

House Financial Services Committee Chairman Barney Frank (D-Mass.) said in an interview that he supports the moves by Bank of America and JPMorgan Chase. But Frank said he will still push forward with legislation requiring changes in overdraft policies at banks. The Federal Reserve is also considering strict curbs on overdraft fees that could be finalized later this year.

The policy change by the two giant banks "confirms that it's doable," Frank said. "No one else will be able to argue that it's too burdensome."

A spokeswoman from Senate Banking Committee Chairman Christopher Dodd's office (D-Conn.) said the senator is still moving forward with legislation.

Rolling back fees poses a high-stakes dilemma for banks.

The industry earned $39.5 billion from service charges on deposits last year, according to data from the Federal Deposit Insurance Corp. Fees for everything from ATM usage to balance transfers accounted for about 25% of the industry's total revenue, and are welcome as banks wrestle with losses from the the nationwide housing depression and severe U.S. recession.

But critics say levying heavy fees to customers is unfair, since the U.S. government recently allocated more than $700 billion to support troubled American lenders. Consumer advocates have paraded examples of consumers who have paid $40 for a cup of coffee because they unwittingly ran a negative balance in their checking account.

"A couple of financial institutions taking voluntary steps," said Eric Halperin, director of the Center for Responsible Lending, "doesn't end the need for legislation."

Bank of America and JPMorgan Chase said this week they would place lower limits on the number of overdraft fees they charge customers each day. The banks also plan other changes.

Bank of America accelerated and strengthened changes it had been considering earlier in the year, according to a person familiar with the situation.

JPMorgan also said it will rescind its policy of re-ordering customers' debit-card and ATM transactions at the day's end.

Some banks maximize penalties by processing the largest purchase a customer makes first, draining accounts faster and creating the potential for multiple fees on smaller purchases. JPMorgan said it's ending this practice for most transactions.

Later this fall, TD Bank, a unit of Toronto-Dominion Bank, will also stop this practice, and will instead post most account transactions chronologically.

"That's much more predictable, fair and transparent," said Matthew Chevalier, TD Bank's senior vice president of day-to-day product management.

"We're going to maintain the momentum of the bank through continued customer retention and staisfaction," Chevalier said. "I don't have any plans to introduce new fees."

Mike Moebs, founder of Moebs Services Inc., which collects fee data from nearly every U.S. bank, says banks can actually grow customer ranks and revenues by lowering fees.

In October, Pittsburgh-based PNC, the fifth-largest U.S. bank by assets, will lower each customer's first incurred overdraft fee from $31 to $25 and will also do away with a $15 fee for enrolling in an overdraft protection product, PNC spokesman Frederick Solomon said.

Cincinatti-based Fifth Third said Wednesday it's looking at ways to eliminate what it calls punitive account fees triggered by certain customer actions. The bank has instead worked to develop products that charge up-front fees.

But the big regional bank said it won't change its policies regarding overdraft fees until Congress and bank regulators decide how to hand down a fresh round of laws and restrictions.

"I think we're going to take more of the wait-and-see approach," said Mark Erhardt, Fifth Third's senior vice president for retail products. Any changes will require the bank to modify its computer systems, he said.

At Wells Fargo, "Most of our customers don't need overdraft coverage in any given month, but for those that do we hope these changes, along with the tools we already provide, will help them minimize overdraft fees," said Carrie Tolstedt, senior executive vice president and head of community banking at the bank.

A spokeswoman for Citigroup Inc. (C) said the announced changes at Bank of America and Chase bring those banks' policies in line with Citi's, although Citi still re-orders transactions at the end of the day.

-By Marshall Eckblad, Dow Jones Newswires; 212-416-2156; marshall.eckblad@dowjones.com

(Dan Fitzpatrick and Jane J. Kim in New York contributed to this article.)