PHILADELPHIA–How do Americans view the “seismic shift” taking place in banks as more large banks now offer small-dollar loan products and have made substantial changes to their overdraft and nonsufficient funds (NSF) fees policies? A new survey analysis by The Pew Charitable Trusts offers some answers.
“Recent changes on bank overdraft and NSF fees are on track to save consumers $5 billion a year while the spread of small-dollar lending by banks will increase access to affordable credit for millions of Americans, including many with low or no credit scores,” Pew Charitable Trusts stated in releasing its findings.
The Findings
In the analysis, Pew found:
- 88% of Americans support banks and credit unions providing small loans under $1,000 to their customers
- 82% thought it was fair for a bank to charge a $30 fee for a three-month, $500 loan
- 71%) believe that it is unfair for a bank to charge a $35 overdraft fee
- 87%) said that $35 nonsufficient funds (NSF) fees, charged when a customer tries to make a payment but there is not enough money in the account and the bank does not cover the payment, are not fair
- 84% of Americans believe that regulators should encourage banks to reduce overdraft fees, while 54% said that regulators should encourage banks to eliminate overdraft fees.
Additional Findings
Pew noted that a prior analysis found that the bank loans’ prices are at least 15 times lower compared to the average payday loan and could save borrowers billions of dollars if more banks offer similar loans.
Americans spend more than $20 billion annually to borrow small amounts of money from payday, auto title, and other high-cost lenders, Pew noted.
For the full survey results, go here.
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