Annual Number of Overdrafts/NSFs Per Account


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Overview

The financial services industry has become increasingly reliant upon fee income as a source of revenue. In particular, overdraft and NSF fees are the single largest contributor of fee income for the average institution. A number of legislative, regulatory, and consumer pressures are threatening this revenue stream, which may require organizations to alter the products and services offered to customers. The events of recent months have left many institutions to reevaluate their current fee income strategies, and formulate a plan to move forward in this new era of consumerism.

• In September, the nation's three largest banks announced changes to their overdraft program policies.
• In October, the House and Senate both introduced bills that would drastically limit fee income on checking accounts, which in turn will threaten the viability of the free checking product.
• On November 12, the Federal Reserve announced new rules requiring financial institutions to obtain consumer consent for overdraft services on ATM and debit card transactions.

Research Objectives

To assist in this evaluation process, RFG has conducted a benchmarking study to measure the impact that potential policy changes will have on individual institutions, along with recommendations and strategies to help respond to the challenge. The report contains in depth analysis on these topics:

• What is the dollar impact of proposed policy changes for each individual institution?
• Evaluation and comparison of current fee overdraft program and fee schedules
• Impact of different regulatory change scenarios, including:
  • Opt-in v. Opt-out requirements for overdraft coverage
  • Annual or monthly limits on ODP or NSF fees
  • Priority Posting changes
  • Maximum fee allowed based on proportionality to transaction costs
  • No NSFs on debit card or ATM transactions
  • Daily limits on overdrafts
  • Negative balance grace zones
• How does your institution compare to others in terms of the impact of the potential changes?
• What is the appropriate response or strategy given different change scenarios?
• How do individual institutions recover lost fee income that may result from different regulatory changes?
• What is the impact on customers?

Cost

The cost to participate in the Overdraft and NSF Benchmarking Analysis is $500. The cost includes a fully customized report displaying the analysis for your institution, along with the benchmark data from other participants. The results will be presented and discussed with participants via a group web conference. If you are not interested in receiving a customized report based on your institution's data, you may still order the benchmark report for $500

Period

The initial Benchmarking Study was conducted in February/March of 2010. Updates will be available each month as participants join the study.

Participate in the Study

Click here to participate in this benchmark study by completing the order form. You will then be sent a survey so we may collect the appropriate data fields. If you are not interested in supplying data, simply respond by saying please send the benchmark report only.