The CFPB recently published research on banks’ continued reliance on overdraft fees and the lack of competition on overdraft terms, highlighting our ongoing and growing concern about the impact of bank overdraft fees on families. Recent weeks have seen an uptick in changes banks are making to their overdraft programs. While millions of Americans are familiar with overdraft fees, nearly all banks also charge non-sufficient fund fees (NSF) for rejected transactions. Overdraft and NSF fees cost Americans an estimated in 2019. And while these fees dropped during the pandemic, they’ve still cost people billions during this crisis – and were climbing through the third quarter of 2021.
As the CFPB has been focusing on this issue again, there has been a notable trend of banks announcing changes to their overdraft programs. These announced changes vary widely and include:
- eliminating NSF fees charged when transactions bounce;
- reducing the size of the overdraft fee;
- reducing the number of overdraft/NSF fees the bank can charge you each day;
- providing or increasing the amount your account can go negative before charging an overdraft fee;
- providing a grace period for you to bring the account back to positive before charging an overdraft fee; and
- eliminating “extended” or “sustained” overdraft fees charged when the account is not brought back to a positive balance after a certain period of time.
Collectively these changes represent an encouraging step by some banks in the right direction. We’ve prepared a table providing a snapshot of large banks’ overdraft and NSF practices. The table shows key overdraft/NSF practices of the twenty banks earning the most in overdraft/NSF revenue through the first three quarters of 2021, reflecting over 80% of the total overdraft/NSF fees earned by banks with assets over $1 billion. The table is based on publicly available information, including press releases, publicly available account disclosures, and news reports. You can use our table to see how your bank compares to others.
We are continuing to monitor these developments to better understand the impact of these changes, and to work to ensure that banks continue to evolve their businesses to reduce reliance on overdraft and NSF fees. Our work on overdraft/NSF fees is part of a larger CFPB initiative to save Americans billions of dollars by promoting competition and reducing junk fees. We are accepting on our new initiative. You can until March 31.
If you're having an issue with a consumer financial product or service, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).