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Overdrafts Soar
Created by m.moebs on 10/29/2023 9:44:42 AM

Basic economics: lower the price and demand for the service rises.
Financial service executives are finding the old, high overdraft price kept volume low.
This report shows how features of checking and ODs can be changed to influence more business.
Semper, Mike

OD Volume Skyrockets as OD Price Plummets
“If you lower it, they will come,” says Moebs
Michael Moebs, Economist & Chair of Moebs $ervices, LLC (M$) a Private Financial Service Research Firm.
LakeForest,IL(October29,2023) FromJune2019toJune2023,thenumberofoverdrafts(OD)rose +37.1% to over 1.4 billion. At the same time, OD prices have tumbled (32.9%) from $30.51 to $20.44. Price X Volume = Revenue fell (8.7%) to $30.9B from about $34B.
“Financial Institutions (FIs) finally realize the lower the OD price, the more consumers use overdrafts especially in these financial hardship times for most American households,” points out Moebs.
“M$ has said for decades the era of penalizing consumers for mistakes to change their “bad” behavior is gone. People make errors. Punishing people for errors is second millennial thinking. Reasonable prices like Bank of America’s $10 coupled with marketplace compliance such as grace periods is a much more friendly and profitable way to approach fees,” exclaims Moebs. “And we have over 1,000 clients over the years to prove it!” READ FULL ARTICLE

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