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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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