InfoBytes Blog
CFPB says overdraft/NSF revenue has been cut in half
On May 23, the CFPB published another data spotlight reporting on overdraft/non-sufficient fund (NSF) fee trends. Earlier in the month, the Bureau examined low- and moderate-income consumers’ experiences with overdraft programs, finding, among other things, that many consumers were not aware of their financial institution’s overdraft policies and thought protection automatically came with their account, while others were unaware that they could end overdraft protection. (Covered by InfoBytes here.) The newest data spotlight reported that overdraft/NSF revenue for Q4 2022 was down nearly 50 percent as compared to pre-pandemic levels, “suggesting an annual reduction of over $5.5 billion going forward.” According to the Bureau, this translates to average annual savings of more than $150 for households that incur overdraft/NSF fees (with many households being able to save a lot more). Still, even with the noticeable reduction, consumers paid more than $7.7 billion in overdraft/NSF fees in 2022. However, the Bureau noted that combined account maintenance and ATM fees remained flat from 2019 to 2022, suggesting that reporting financial institutions are not increasing other fees to compensate for the reduced revenue.