The claim by industry consultant Mike Moebs that overdraft revenue is "rising from the ashes" (CU Journal, Sept. 26) appears more wishful thinking than reality. Our national survey shows most consumers don't want high-cost bank overdrafts. And most of the one-in-three customers who do sign up for it do so because they either misunderstand what they're getting or want banks to stop badgering them to enroll.
Even so, large banks have not gotten "out of the overdraft business" and left it for credit unions. Most of the top 10 banks, including Wells Fargo and Chase, continue to charge high-cost overdraft fees on debit/ATM transactions. Other research also differs from Moebs'. Bretton Woods Research, for instance, estimates a drop in overdraft revenue that's twice as large as Moebs' estimate. But the real bottom line is that no bank or credit union should offer overdraft or any product that carries unreasonable fees, which bear no relation to cost or risk. Some banks and CUs choose to listen to consumers, do the right thing, and not offer it, including Citibank, Bank of America, N.C. State Employees CU and our own affiliate, Self-Help CU.
Josh Frank, Senior Researcher
Center for Responsible Lending
Oakland, Calif.
