LAKE BLUFF, Ill.—Overdraft usage at FIs dropped to its lowest point in the last 14 years at the close of the second quarter, according to a new study by Moebs $ervices.
According to the report, consumer overdrafts declined 2.8% over the first quarter to seven overdrafts per checking account per year. Consumer OD totals were 6.8 per account in ’99. Michael Moebs, economist and CEO at Moebs $ervices, attributed the decline (which has occurred two quarters in a row) to consumers becoming much more frugal.
“Macro-economic issues are affecting consumers' attention to their budgets,” said Moebs, who believes the biggest impact is from smaller paychecks this year due to the end of the Social Security payroll tax cut Jan. 1.
Overdraft revenue at the end of 2Q increased modestly to an annualized $31.3 billion. The approximately $200-million rise from the first quarter of 2013 still trails year-end 2012, which was at $32 billion. FIs raising their OD prices is keeping revenue up, said Moebs, who pointed out CUs are leading the way with hikes.
“For almost two years, since the third quarter of 2011, the median price nationally was $29, with the banks and thrifts higher at $30 and credit unions at $25. Over the past two years, credit unions have increased their fees from $25 in 2011, to $27 in 2012 and now $28 in 2013,” said Moebs, who reported the trend in a Credit Union Journal report earlier this year.
