Regulation E Forces Overdraft Changes, Says Moebs
A recent survey conducted by economic research firm and overdraft program provider Moebs Services showed that 1,800 banks and credit unions have made changes to their overdraft strategy since Regulation E was made a requirement in November 2009 by the Federal Reserve.
The results were from a survey of 2,000 banks and credit unions and was conducted in early March.
"Two facts from this survey surprised us," said Mike Moebs, economist and CEO of Moebs Services. "Those were the number of depositories that started overdraft programs for the first time and the number that stopped offering overdraft programs."
Eleven percent of those surveyed started a new overdraft program and 13.5% stopped offering overdrafts.
"So, Bank of American wasn't the first to do this: over 200 institutions have," Moebs added. "This is an incredible opportunity for community banks and credit unions to grab market share and help those 33 million Americans whose banks have stopped offering overdrafts."
Among those that made changes to their overdraft programs, 18.4% decreased their overdraft fees. Fifty-seven percent increased their overdraft fees.