Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

CU System
Overdrawn accounts net 37 billion in fees
ST. SIMON’S ISLAND, Ga. (1/15/09)--As their earnings undergo more pressure due to the economy, financial institutions are becoming more reliant on fees from non-sufficient funds (NSF) and overdrawn checking accounts, according to new research. Financial institutions collected $37 billion in NSF and overdraft protection (ODP) fees in 2008, a significant increase since 2004, according to Bretton Woods, a Georgia-based bank strategy consulting firm. The study cites Bankrate.com data showing a 7% increase of the fees from 2005 to 2008. Nationally, the average household has more than 12 overdraft transactions per year and pays $368 per year in fees, said the study. The average NSF fee is $28.95. Roughly 20.2 million households with banking accounts account for most (1.02 billion) of the non-sufficient funds. These more “active” households paid $1,472 in annual NSF fees. Not only did the fees increase, but the number of debits presented against insufficient funds soared to 1.28 billion, an increase of 16.3% in the past three years, according to the study. The average U.S. household with a banking account incurs 12.7 NSF fees per year, according to the study, which counted 1.28 billion separate check and electronic NSF item last year. For banks, 74% of reported service fee income comes from NSF/ODP. Bretton Woods estimated that 80% of what little fee income credit unions do charge comes from NSF fees. Banks’ fees, however, are more diverse and cover a range of other types of fees. Credit unions, because of policies such as not charging for ATM transactions, limit fee income to a narrower field, which includes recouping costs of bounced checks. According to the data in the report, banks’ fees in 2008--based on data from the Federal Deposit Insurance Corp.—were more than six times that of credit unions’ fees—based on data from the National Credit Union Administration.
Other Resources

RSS print
News Now LiveWire
96 #creditunions across Britain have applied for funding from Lloyds Banking Group #CreditUnion Development Fund http://t.co/quq3OEE0Qq
11 hours ago
Eight new ideas hatched from @fileneresearch innovation incubator #NewsNow http://t.co/h6Ev6q3HnQ
11 hours ago
Homebuilder confidence continues to climb #NewsNow #Market http://t.co/UTBSpmoeZD
13 hours ago
Mich. league issues 4th consecutive dues rebate #NewsNow http://t.co/MGxMRRLrkb
14 hours ago
Passwords: It's not what you type, it's *how* you type via @Forbes http://t.co/QsPjmGjA4K
15 hours ago