Published: December 2016

Overdraft fees are big business for big banks

Frustrated by overdraft fees charged by your bank? You're not alone. A new report filed by U.S. PIRG Education Fund explains how overdraft fees result in billions in revenue for financial institutions across the country. Is your bank on the list of the worst offenders?

An analysis of new government data by U.S. PIRG Education Fund found that big banks made $8.4 Billion in overdraft fee income in the first three quarters of 2016, up nearly 4% from the same period in 2015. Since the beginning of 2015, all banks greater than $1 Billion in assets have been required to report fee data quarterly and are included in the study.

Key highlights of “Big Banks, Big Overdraft Fees,” co-written with The Frontier Group, include the following:

• Through the first three quarters of 2016, 626 large banks reported collecting $8.4 billion in revenue from overdraft and NSF fees, an increase of 3.6 percent over the same period in 2015.
• Ten banks account for 67 percent of reported overdraft/NSF revenue. The 10 banks that collected the most overdraft revenue through the first three quarters of 2016, in order, were: Chase Bank, Wells Fargo, Bank of America, TD Bank, U.S. Bank, PNC Bank, Suntrust Bank, Regions Bank, Branch Banking and Trust, and Woodforest National Bank.
• The 10 banks that collected the most overdraft/NSF revenue per account through the first three quarters of 2016, in order, were: Ameris Bank (based in Georgia), ACNB Bank (Pennsylvania), Armed Forces Bank (Kansas), Woodforest National Bank (Texas), BankPlus (Mississippi), First National Bank Texas - First Convenience Bank (Texas), Ocean Bank (Florida), Planters Bank (Mississippi),  Gate City Bank (North Dakota), and First Community Bank (Virginia).
• Banks supervised by the CFPB collect less overdraft fee revenue per account. All banks are subject to the CFPB’s rules but banks with more than $10 billion in assets are also supervised, or examined, directly by the CFPB, a new federal agency created for the sole purpose of protecting consumers in the financial marketplace. In the first three quarters of 2016, 94 banks under CFPB supervision that reported fee revenue collected $17.27 in overdraft revenue per account, compared to $21.36 per account for the 532 other banks that reported revenue. [Banks with less than $10 billion in assets are examined by their “charter class” regulator, either the OCC, the FDIC, the Federal Reserve or the National Credit Union Association.]

 

For More Information

For more information, visit U.S. PIRG's website.

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Banking   ♦   Consumer Protection   ♦   Credit Cards   ♦   Money Management   ♦