CFPB reports on banks’ overdraft fee practices
On July 20, the CFPB published a blog post examining banks’ overdraft and non-sufficient fund fees (NSF) fees practices since the publication of their report “Overdraft/NSF Fee Reliance Since 2015 – Evidence from Bank Call Reports” in December 2021. According to the blog post, the Bureau relied on additional data from the call report from the last three available quarters – the third quarter of 2021 through the first quarter of 2022. The December 2021 report used aggregate Call Report data from 2015 to 2021 from banks with assets of over $1 billion to examine the evolution of banks’ reliance on overdraft and NSF fees. The report found a lower reliance by banks on overdraft and NSF fees during the pandemic and continuing into 2021, which the Bureau said “reflects the relatively larger continued shortfall of overdraft and NSF fees in relation to their pre-pandemic volumes compared to the shortfall in maintenance and ATM fees.” While reliance on overdraft and NSF fees varied considerably among banks, the report noted that these fees represented close to two-thirds of banks’ reported fee revenue and were generally stable over time for any given bank.
According to the July 20 blog post, the Bureau found that the recent increase in overdraft revenue is greatest among small and midsize banks. However, the data shows that overall overdraft revenue stopped its decline and reversed somewhat, and ended up 20.1 percent below the corresponding 2019 levels. The CFPB also noted that revenues from other listed fees, such as account maintenance and ATM fees, has increased since 2020, especially at banks that experienced the largest declines in overdraft/NSF fee revenues.