Overdraft Price Rises to $30 Per Transaction, Per Moebs Study

Led by Credit Unions, OD Prices Increased Over the Last 6 Months

LAKE BLUFF, Ill.--()--The national price for an overdraft on a checking account, whether with paper, check or debit card, at an ATM or via ACH, rose to $30 per transaction, according to the latest study on overdraft prices by Moebs $ervices, an economic research firm specializing in financial services. The survey covered 2,906 depositories reporting fees as of June, 2013 compared with OD fees reported six months previous in December.

Modest Price Changes Increase Overall Price

Median National Overdraft Charge
Year 2013 2012 2011 2010 2009
Banks $30 $30 $30 $30 $29
Credit Unions $28 $27 $25 $25 $25
National $30 $29 $28 $28 $26
Source: Moebs $ervices Survey June 2013 2906 Depositories

Banks and thrifts continued to hold the OD price at $30 per transaction as they have for the past 4 years while credit unions increased their price for the second year in a row to $28, bringing the national median overdraft fee to $30. “Despite the increases by credit unions, their ODs fees remain $2 lower than banks which is still a statistical difference,” said Michael Moebs, economist and CEO of Moebs $ervices. “Credit Union’s falling OD volume forces them to increase price to maintain revenue. Overall industry OD revenue fell in the first quarter to an annualized total of $31.1 billion.”

Size Matters for the Consumer

The largest Financial Institutions (FIs) have the highest price at $35 per overdraft while the main street community banks and credit unions have the lowest price at $25. “The consumer who either occasionally or frequently overdrafts saves substantially by going to community banks and credit unions,” says Moebs. The Moebs study also showed that FIs from $25 billion to $50 billion in asset size had the biggest price increase from $30 in 2012 to $35 in 2013 or a 16.7 percent increase. “Shopping can produce big savings for the consumer,” notes Moebs.

OD Prices
Asset Size

All Depositories

Billions & Millions

Median

OD

Price

>$50B $35
$25B - $50B $35
$5B - $25B $33
$1B - $5B $30
$500M -$1B $30
$100M - $500M $29
<$100M $25

Source: Moebs $ervices Survey

June, 2013 2906 Depositories

OD Fees Vary Widely by Location

The West and Midwest regions still have lower OD prices with a median of $29 in comparison to the South and East regions which have a median price of $30. For many years, fee prices were national, so the dissimilar regions may reflect an emerging trend. San Francisco comes in at a low of $25 per OD while Kansas, the lowest-priced state at $25, replaces long-time low price leader California. In contrast, Tampa has the highest prices for a city at $34 per overdraft replacing the long-standing urban leaders of Washington DC and Miami. The state of Delaware is highest for a state at $34, replacing Florida as a long-standing state high price leader.

“These variations by region, city and state, demonstrate overdraft prices are starting to vary widely and are becoming factors in the local and regional marketplace rather than just following a national trend,” concludes Michael Moebs. “Coupled with economic factors such as taxes, seasonal trends and regulation, which influence the volume of overdraft transactions, these price and volume variances are making fee income at FIs a bellwether of performance.”

About Moebs $ervices

Since 1983, Moebs Services has independently collected statistically significant, primary empirical data about financial institutions’ services, pricing, operating expenses and financial condition, analyzing the data in a counterintuitive manner which provides solutions that make sense. For more info please visit www.moebs.com

Contacts

For Moebs $ervices
Liam Collopy, 510-635-4150
C: 415-517-9760
lcollopy@hardenpartners.com

Release Summary

The national price for an overdraft on a checking account, whether with paper, check or debit card, at an ATM or via ACH, rose to $30 per transaction, according to the latest study on overdraft prices

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Contacts

For Moebs $ervices
Liam Collopy, 510-635-4150
C: 415-517-9760
lcollopy@hardenpartners.com