Consumers Stand to Lose $6.3 Billion in Short-
Term Credit as Banks Brace for Regulation E,
According to Bretton Woods
$7.3 Billion in Bank Revenue in Jeopardy
March 04, 2010 09:50 AM Eastern Time
ST. SIMONS ISLAND, Ga.--(EON: Enhanced Online News)--Today, Bretton Woods Inc. released their 2009
annual analysis of bank and credit union overdraft (OD) and non-sufficient funds (NSF) fees, which totaled $38
billion. Bretton Woods, a bank strategy and consulting firm, has analyzed overdraft and NSF fees since 1998. This
year, the report reveals an increase in bank revenue from NSF and overdraft fees, which will dry up in 2010 with the
implementation of Regulation E, reducing available short-term credit for consumers by a projected $6.3 billion. To
read the full study, please visit http://bretton-woods.com/71801.html.
“Banks made a tremendous amount of money—over $38 billion—from overdraft and NSF fees in 2009,” said
Bretton Woods CEO Michael Flores. “Once Regulation E goes into effect, consumers will have to opt-into these
fees. Banks will struggle to recover that revenue and consumers will need to replace $6.3 billion in short-term
credit.”
The report’s key findings include:
Fee Income
l In 2009, bank and credit union income from NSF and OD fees exceeded $38 billion, which is an increase of
$3.5 billion (10%) since 2008, and an increase of 27% since 2005.
l NSF/OD fee income by state ranged from nearly $34.5 million in Vermont to $4.6 billion in California.
NSF/OD Transactions
l The average U.S. household with a bank account incurred 12.7 NSF/OD fees in 2009, up from 11.9
NSF/OD fees in 2008 – a 7% increase.
l Bank and credit union data used in Bretton Woods’ modeling calculated 1.3 billion separate check and
electronic NSF/OD items, an 8 % increase from 1.2 billion in 2008.
NSF/OD Prices
l The average NSF/OD price increased from $28.95 in 2008 to an all-time high of $29.58 in 2009.
NSF/OD Cost per Household
l The national annual NSF/OD cost per household with checking acco