WASHINGTON–Revenue earned from overdraft and non-sufficient funds (NSF) fees for banks and other financial institutions was down by nearly half in the final quarter of 2022 compared to pre-pandemic levels, according to new data from the Consumer Financial Protection Bureau (CFPB).
The Bureau said its review of revenue “suggests” the more than $5.5 billion reduction in the fees on an annual basis going forward.
Overall, the CFPB said NSF/OD fees totaled $7.7 billion in 2022.
In its new analysis, the CFPB reported fee revenue for the fourth quarter of 2022 was about $1.5 billion lower than the fourth quarter of 2019, the last quarter prior to the start of the coronavirus crisis. That figure is 48% lower than that collected in 2019, according to the CFPB, which then extrapolated that into an annual reduction of more than $5.5 billion in coming years.
$150 or More Per Household
“This decrease suggests average annual savings of more than $150 per household that incurs overdraft or NSF fees; many households have saved much more,” the agency said in releasing its numbers.
The CFPB reported the downward trend in overdraft/NSF fees was evident in every quarter of 2022. Quarterly revenue was approximately $2.2 billion, $2 billion, $1.9 billion, and $1.6 billion for the first through fourth quarters of 2022, respectively, the Bureau said.
Effects on Revenues
“This quarterly trend further indicates that overdraft/NSF policy changes are impacting bank revenues – especially since, historically, overdraft/NSF revenues in quarters three and four have typically been higher than in quarters one and two,” the CFPB said.
The Bureau further said its analysis further suggests that although the overdraft/NSF fee revenue is declining, financial institutions apparently are not turning to other fees to make up the deficit, reporting it found no increases in other checking account fees, such as account maintenance and ATM charges.
The CFPB said revenue from those charges remained was flat from 2019 to 2022.
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