Based mostly on two new analysis experiences (see here and here) the CFPB will improve supervision of banks which might be closely reliant on overdraft charges and “will be taking action to restore meaningful competition to this market.”
The researchers discovered that banks rely closely on overdraft and non-sufficient funds income to feed their revenue fashions and that overdraft charges current critical dangers to shoppers. The researchers discovered that in 2019, overdraft and non-sufficient funds income reached an estimated $15.47 billion, which was virtually two thirds of the market’s general reported price income. Due to the chance to shoppers, the CFPB said they are going to improve their oversight of this observe.
Additional, “using the most detailed and wide-ranging quantitative data the Bureau or others have collected on overdraft policies, practices, and outcomes at small financial institutions,” researchers reported that in 2014, 92.9% of smaller banks and 60.9% of credit score unions had an overdraft program,” and “whereas overdraft and NSF charges have been 13 to 19% decrease at small banks and credit score unions than at massive banks, credit score unions and small banks with an overdraft program earned $42.33 and $40.37 in annual overdraft income per account, respectively, which was simply 6% and 11% lower than massive banks.”