Industry revenue from overdraft fees held
fairly steady until last year when banks waived
fees across the board in the first months of the
pandemic, when millions of Americans lost their
jobs and businesses were shuttered. Revenue
from overdraft fees fell to $8.82 billion last year
from $11.68 billion in 2019, according to data
collected by S&P Global Market Intelligence.
Through the first nine months of this year,
overdraft revenue totaled $6.13 billion, S&P
Global’s data show.
Despite an outcry from some Democrats,
regulators in Washington aren’t necessarily
looking to do away with overdraft fees. In a
speech, the acting head of the Office of the
Comptroller of the Currency, Michael Hsu, said
“low- to no-cost overdrafts” would allow those
living paycheck to paycheck “to pay their bills on
time, avoid high-cost alternatives and improve
their credit profile.”
Hsu said recent changes to overdraft policies
by some banks could serve as a model for
the industry.
Regional banking giant PNC launched new
account features such as low-balance alerts
and a grace period that will help consumers
avoid overdraft fees. PNC also plans to limit
overdrafts to one per day.
Pennsylvania-based PNC told investors
to expect its overdraft fee revenues to be
down $125 million to $150 million annually
as the bank rolls out the “Low Cash Mode”
product. PNC earned nearly $273 million in
overdraft fee revenue last year, according
to S&P Global.