Most Important Consumer Fee? Created by m.moebs on 8/21/2022 5:15:07 PM OD Revenue Increase Yet Not to Pre-COVID Levels
"When times are good the consumer overdraws more. When times are bad overdrafts happen less"
G. Michael Mobs, Pricing Financial Services, copyright 1986, current edition.
This is a summary of how overdrafts have dramatically changed with COVID:
State of Overdrafts in 2022
- In the past 25 years ODs have annually averaged 3.5 times for all checking accounts doing or not doing ODs.
- Pre-COVID the annual average was 3.0. Today it is 2.0, after hitting an all-time low of 1.9 in 2021 since 1992.
- Total annualized OD revenue hit $34.4 Billion in the first part of 2022. This is up $1B from year end 2021.
- The median OD price at $30 has not changed since 2013.
- OD volume dipped below 18 transactions in 2021 but has since rebounded hitting 1.18 earlier in 2022.
- OD revenue peaked in 2009 at 27 basis points (bp) to assets and is now 13 bp for all Fls.
"Overdrafts have become a way of life for Americans. ODs are the seat belts of American consumer financial behavior," notes Mobs, economist & CEO of Mobs Services, a private economic research firm with 13 employees.
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