Fintech Nexus Newsletter (February 9, 2024): Overdraft Fees At The Top Three Banks Down 25%

Republished By Plato

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I talk about overdraft fees a lot. I dislike the product as banks have been earning billions from their most vulnerable customers. It is also the area where fintech has had a dramatic impact.

Back in 2019, I wrote about the movement towards no overdraft fees as fintech companies provided better options for consumers. This was years before the CFPB put overdraft fees in their crosshairs.

The impact is now being felt at the country’s largest banks. Today, we learned that overdraft fee revenue in 2023 was down 25% at JPMorgan Chase, Wells Fargo and Bank of America. The total is still $2.2 billion which is too much but change like this doesn’t happen quickly.

If and when the CFPB’s new overdraft rules come into effect this number will reduce dramatically. Meanwhile, fintech companies continue to provide a better alternative to overdraft fees.

While we won’t get to zero any time soon, we will continue to see reduced overdraft revenue at large banks, which is a great thing for consumers.

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> Big banks have drastically cut overdraft fees, but customers still paid $2.2 billion last year

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Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.

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