MADISON, Wis. — At the same time one new research report indicates banks have actually slightly reduced overdraft fees in recent months, a separate study is showing bank customers continue to pay substantially more not just in overdraft fees but overall fees than do credit union members.
The study, by University of California, Davis assistant professor of economics Victor Stango and Dartmouth College associate professor of economics Jonathan Zinman, is based upon an examination of transaction account fees from the account data of a panel of consumers. The study notes that while some of the cost differences "can be attributed to behavior, much of the difference simply stems from banks' higher prices."
Not surprisingly, the FIlene study has found that the "largest driver of the bank/credit union fee difference is the overdraft fee, which on average is roughly one-third lower at credit unions than at banks. Credit unions also charge significantly lower ATM foreign fees."
According to the report, credit union members pay an average of $35 a year in overdraft fees, vs,. $132 in overdraft fees at banks over the same period of time. Similarly, the study found that members pay an annual average of $73 in total transaction fees (including ATM foreign fees, ATM surcharges, and other fees), bank-customer households paid $183 in fees during the same time period.
In addition, the two authors examined low-balance accountholders, which they defined as balances under $1,500, paid $165 per year in overdraft fees at their bank, while low-balance credit union members paid $42 in those same fees.
