I talk about overdraft fees a lot. I dislike the product as banks have been earning billions from their most vulnerable customers. It is also the area where fintech has had a dramatic impact.
Back in 2019, I wrote about the movement towards no overdraft fees as fintech companies provided better options for consumers. This was years before the CFPB put overdraft fees in their crosshairs.
The impact is now being felt at the country’s largest banks. Today, we learned that overdraft fee revenue in 2023 was down 25% at JPMorgan Chase, Wells Fargo and Bank of America. The total is still $2.2 billion which is too much but change like this doesn’t happen quickly.
If and when the CFPB’s new overdraft rules come into effect this number will reduce dramatically. Meanwhile, fintech companies continue to provide a better alternative to overdraft fees.
While we won’t get to zero any time soon, we will continue to see reduced overdraft revenue at large banks, which is a great thing for consumers.
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> Big banks have drastically cut overdraft fees, but customers still paid $2.2 billion last year
Overdraft revenue is on the decline, but recent filings show that JPMorgan Chase and Wells Fargo remain by far the largest generators of the controversial fees.
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