The National Credit Union Administration (NCUA) has released a Research Note that provides an analysis of statistics for overdraft and non-sufficient funds fees, and observations on the relationship between overdraft and non-sufficient funds fees and other revenues.
The California and Nevada Credit Union Leagues are currently reviewing this note and will provide further insights soon.
“This Research Note provides important information for consumers, researchers, credit unions, and regulators about the use of overdraft and NSF fees at credit unions,” NCUA Chairman Todd M. Harper said in a news release. “The findings suggest that credit unions are not offsetting this income through reduced fees for other services or lower interest rates. Credit unions that rely heavily on fee income from overdrafts and NSF fees have concentration risk issues, which raises potential safety-and-soundness concerns. And, on the other side of the transaction, consumers who can least afford it are often paying an oversized portion of those fees. It’s time for credit unions to rethink their overdraft and NSF programs.”
Beginning with the first quarter of 2024 Call Report, federally insured credit unions with more than $1 billion in assets were required to submit their year-to-date revenues from overdraft and NSF fees. The Research Note, prepared by NCUA’s Office of the Chief Economist using revenue data from the first three quarters of 2024, evaluates overdraft and NSF revenues as a fraction of total revenues.
The Research Note highlights two observations:
The NCUA’s Office of the Chief Economist will continue to analyze evolving trends in overdraft and NSF fees revenue as additional data become available.
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:
Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!
Additionally, other League-member compliance resources include:
For more information, email Lisa Quaranta.
Powered by ViClarity, a California and Nevada Credit Union Leagues company.
