The CFPB has published a table that shows the overdraft/NSF practices of the 20 banks with the most overdraft/NSF revenue through the first three quarters of 2021. According to the CFPB, the table reflects over 80% of the total overdraft/NSF fees earned by banks with assets over $1 billion. The information in the table is based on publicly available information, including press releases, publicly available account disclosures, and news reports.
For each of the 20 banks, the table indicates the bank’s overdraft/NSF revenue for 9 months ended September 2021, the amount of the bank’s overdraft and/or NSF fee, the bank’s daily limit on the number of overdraft/NSF fees, and whether the bank has:
- No overdraft fees on any transactions
- No NSF fees
- No overdraft fees on debit card purchases
- No overdraft fees on ATM withdrawals, or
- No extended/sustained overdraft fees
The table’s publication follows the CFPB’s December 2021 announcement that it would be enhancing its supervisory and enforcement scrutiny of banks that are heavily dependent on overdraft fees. The announcement was accompanied by the CFPB’s release of two new reports about bank overdraft practices and statements by Director Chopra warning banks—and responsible executives—that they could be at risk if the banks engage in overdraft practices deemed to violate Dodd-Frank’s UDAAP prohibition.
In its blog post about the release of the table, the CFPB stated:
Recent weeks have seen an uptick in changes banks are making to their overdraft programs. While millions of Americans are familiar with overdraft fees, nearly all banks also charge non-sufficient fund fees (NSF) for rejected transactions. Overdraft and NSF fees cost Americans an estimated $15.5 billion in 2019. And while these fees dropped during the pandemic, they’ve still cost people billions during this crisis – and were climbing through the third quarter of 2021.
The CFPB comments that “as the CFPB has been focusing on this issue again, there has been a notable trend of banks announcing changes to their overdraft programs.” The CFPB calls the changes “an encouraging step by some banks in the right direction.” The changes noted by the CFPB consist of:
- Eliminating NSF fees charged when transactions bounce
- Reducing the size of the overdraft fee
- Reducing the maximum number of overdraft/NSF fees the bank charge each day
- Providing or increasing the amount an account can go negative before charging an overdraft fee
- Providing a grace period for a customer to bring the account back to positive before charging an overdraft fee
- Eliminating “extended” or “sustained” overdraft fees charged when the account is not brought back to a positive balance after a certain period of time
The CFPB concludes the blog post with the statement that it is continuing “to work to ensure that banks continue to evolve their businesses to reduce reliance on overdraft and NSF fees” and that such work “is part of a larger CFPB initiative to save Americans billions of dollars by promoting competition and reducing junk fees.”