Since President Biden took office in January, several US banks have announced major business changes that will reduce the amount of revenue they generate from overdraft fees.
Other banks have indicated that they are reconsidering the fees, which have long been a key pillar of fee income despite persistent criticism from consumer advocates.
The recent changes, which are being led by regional banks, range from eliminating overdraft fees altogether to introducing new products that will offer less expensive options to customers who live paycheck to paycheck.
These moves could be bellwethers for an industry that is under pressure to change. They are coming as overdraft-free startups continue to lure customers away from traditional banks. They are also occurring at a time when Biden administration officials – and particularly the new leadership at the Consumer Financial Protection Bureau – are expected to take a tougher stance on overdraft fees.
Read Also
- Argentina: At 76.6% since January, the inflation rate is accelerating further Nov 16, 2022
- How Afterpay deal could transform Square Aug 3, 2021
- Risk of contagion of monkeypox is “very low” (European disease agency) May 23, 2022
- The 15-month highs of the Ibex 35 are an opportunity in these values May 30, 2021
- A Murcian company, tried in France for fraud May 26, 2021
- Atacadao, Costco… Big volume supermarkets, mere competitors or real revolution? Nov 19, 2022
- Morgan Stanley owns 28,000 GBTC shares, valued at more than $ 800,000 – Explica .co Jun 29, 2021
“Overdrafts have the potential to be very costly for consumers, and we are continuing to monitor market activity in this area,” a CFPB spokesperson said in a statement.
In the years before the COVID-19 pandemic, the amount of money that banks collected from overdraft fees remained fairly steady, hovering around 5% of fee income. But last year the revenue cratered, partly as a result of government stimulus programs that padded consumers’ bank accounts, and partly because some banks waived fees in anticipation of widespread economic hardship.
In 2020, banks that reported the data to their regulators collected $ 8.82 billion in overdraft-related revenue, a 24.5% decline from 2019, when those banks raked in $ 11.68 billion. Some industry executives have recently warned investors that they do not expect the revenue generated from overdraft fees to recover.
What follows is a look at 10 banks that are, to greater or lesser degrees, reconsidering overdraft charges.
appId : ‘1203048096448894’,