The Consumer Financial Protection Bureau said community banks charge lower overdraft fees than larger institutions.
Details: The CFPB released new research that said:
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92.9% of smaller banks had an overdraft program during a 12-month period predominantly in 2014, making the programs less common at these institutions than among large banks.
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Overdraft fees were 13.2% lower at small banks than at large banks.
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Small banks with an overdraft program earned 11% less in annual overdraft revenue per account than large banks.
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Smaller institutions were less likely to offer the option to opt in to debit card overdraft.
2020 Totals: Overall, the CFPB said bank overdraft and non-sufficient funds revenues declined 26.2% last year after reaching an estimated $15.47 billion in 2019, likely due in part to higher checking account balances resulting from federal stimulus payments.
Statement: In releasing the data, CFPB Director Rohit Chopra said the data appears to show many banks are “hooked” on overdraft fees to feed their profits. He said the agency will act to “restore meaningful competition to this market.”
