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ICYMI: New Study Projects Overdraft Fees To Fall Nearly 70% By 2023, Yielding $28 Billion In Consumer Savings
In a new analysis released yesterday, the global intelligence firm Curinosexamined the impact of bank-led innovations on the rapidly evolving overdraft marketplace. The updated study accounted for the growing number of banks who have implemented and pledged overdraft reforms since the firm first evaluated the state of the overdraft market in the U.S. late last year.
Commenting on the key findings of the updated analysis, CBA President & CEO Lindsey Johnson said:
“Over the past year, America’s leading banks have introduced new overdraft innovations to provide consumers even greater choice and flexibility to make informed financial decisions. As this Curinos data concludes, the impact of these changes are significant and wide-reaching, with overdraft fees expected to fall by nearly 70% by the end of 2023. Policymakers should be focused on encouraging more of this innovation, which has occurred without regulatory or legislative innovation, and is poised to yield meaningful savings for years to come.”
Key findings from Curinos’ updated analysis to their 2021 study, Competition Drives Overdraft Disruption, include:
- Based on the voluntary changes that have been announced as of Aug. 25, 2022, overdraft fees are expected to fall by 68% between 2008 and the end of 2023.
- These changes are expected to result in $167 in annual savings per U.S. adult by year end 2023.
- As of August 2022, at least 29 financial institutions with more than $10B in assets have announced significant reforms to their overdraft policies.
- Curinos projects institutions with pledged and adopted reforms will reduce overdraft fees by 50% in the period 2019 to 2023.
- If current trends continue, consumers could save more than $28B in the five-year period between 2021 to 2025.
- Overdraft revenue comprises less than 2% of annual industry revenue and less than 4% of industry net income.
To read the full analysis, click HERE.
CBA long has advocated for protecting consumers’ access to emergency safety net products like overdraft and has continued to amplify recent bank-led overdraft reforms.
- In an op-ed in American Banker, CBA President & CEO Lindsey Johnson urged policymakers to recognize the impact of recently unveiled bank-led overdraft innovations designed to expand choice, strengthen transparency, and lower costs for hardworking consumers.
- CBA sent a letter to Congress reiterating longstanding opposition to H.R. 4277, legislation that would restrict access to overdraft for millions of hardworking families who knowingly use and value the product.
- CBA broke down the claims from the reality in a blog post highlighting the consumer benefits of overdraft innovation.
To learn more about CBA’s efforts to correct misinformation and deliver the facts about how emergency safety net products like overdraft are valued by millions of consumers in times of need, click HERE.