Study: Overdraft Fees Climbed at Banks

American Banker  
October 29, 2009
P. 9

In a study released this month, the Center for Responsible Lending (CRL) calculates that overdraft revenue at U.S. banks and credit unions ramped up more than 35 percent from 2006 to $23.7 billion last year. The financial institutions levied a fee of $34 on average per overdraft, often greater than the cost of the transaction that generated the charge. The study results illustrate the widespread use of debit cards, notes CRL senior researcher Leslie Parrish. According to the center's report, small debit card purchases of $5 to $20 were the biggest generators of overdraft fees in 2008. "Today, nearly three-quarters of checking account customers have a debit card, with active card users averaging 17 debit card transactions per month," the CRL study points out. Debit cards "increased the number of overdraft events, while the customer was unaware he had crossed the line." 

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