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Data Point: Checking Account Overdraft at Financial Institutions Served by Core Processors

This Data Point describes overdraft practices and outcomes at several thousand credit unions and banks in 2014 using data provided by core processors. While the data underlying the report are from a few years ago and may not always reflect current practices and outcomes, to our knowledge, these are the most detailed and wide-ranging quantitative data the Bureau or others have collected on overdraft practices at small institutions. “Core processors” are financial institutions who offer deposit, payment, and data processing services to financial institutions. In 2015, the Bureau collected anonymous institution-level information from several core processors about overdraft program configurations, fee revenue, and consumer overdraft use across credit unions and banks of various asset sizes for a 12-month time period predominantly covering 2014. The data obtained informed us about overdraft at 3,904 FIs maintaining 30 million consumer checking accounts.

Overall, we document substantial variation in the policies reported for the FIs in the core processor sample. This variation notwithstanding, it is notable that on average FIs with an overdraft program in the dataset derived similar amounts in annual overdraft revenue per account as the large study banks examined in our earlier reports.

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