CFPB Report Finds Overdraft and NSF Revenue Down More Than 50 Percent in 2023 vs. Pre-Pandemic Levels

According to a new report issued by the Consumer Financial Protection Bureau (CFPB), overdraft and nonsufficient funds (NSF) revenues dropped by $6.1 billion since before the pandemic, or more than 50 percent. Overdraft fees dropped by approximately $4 billion while NSF fees dropped by $1.8 billion. The Bureau estimates this saves the average household that overdrafts $185 annually.

 The Bureau’s analysis also found that after several quarters in which financial institutions reduced their overdraft and NSF fees, that trend now appears to be over.

“Following five straight quarterly declines in overdraft/NSF revenue, such revenue remains flat across all quarters of 2023,” the report reads. “Even with the substantial reductions in fees versus prior years, consumers paid over $5.8 billion in 2023 in reported overdraft/NSF fees.”

The report also notes that “evidence continues to suggest that financial institutions are generally not increasing other checking account fees to compensate for reduced overdraft/NSF revenue. Across all reporting banks, combined account maintenance and ATM fees remained flat from 2019 to 2023.”

Since 2015, banks with assets more than $1 billion have been required to report overdraft and NSF fee revenue in their call report data. From 2015-2019, overdraft and NSF fee revenue reported by these banks totaled $11-12 billion each year. Due to measures believed to be pandemic-related, these revenues were lower in 2020 and 2021. Beginning in early 2022, overdraft and NSF revenues began decreasing.