During the latest quarter, consumer overdrafts declined 2.8% toseven overdrafts per checking account annually at financialinstitutions nationally, making it the lowest consumer usage ofoverdrafts since 1999, but overdraft revenue hit $31.3 billionannually due to higher overdraft fees, according to the latestquarterly study by Moebs Services.

“Overdraft volume decreased as consumers reacted to uncertaineconomic times, so America's financial institutions reacted byincreasing price,” said Michael Moebs, economist and CEO at theresearch firm in Lake Bluff, Ill.

Financial institutions have raised the median price ofoverdraft fees by3.4% since 2011, with credit unions leading the way, the reportnoted.

“For almost two years, since the third quarter of 2011, themedian price nationally was $29 with the banks and thrifts higherat $30 and credit unions at $25,” the report stated. “Over the pasttwo years, credit unions have increased their fees from $25 in2011, to $27 in 2012 and now $28 in 2013.”

Moebs said several factors have prompted consumers to take acloser look at overdraft fees, which impacted the study.

“With the tax increase in Social Security onJan. 1, stemming from government automatic budget increases,consumers' net pay was reduced,” he said. “It takes three to sixmonths for economic fiscal changes to fully show up in themarketplace, and the cut in the average pay hit consumers'pocketbooks in the second quarter of this year.

“Reduced overdraft volume reflects the belt tightening by theconsumer,” he continued. “The back-to-school season shows parentswere conservative in school supply purchases, and recently releasedindividual income data reflects very small increases so far thisyear. The automatic budget cuts, or sequester, have createduncertainty for consumers. Keeping the checkbook balanced andavoiding overdrafts reflect these economic trends.”

The report forecasts that focus on overdrafts will continue. Anestimated 30% to 40% of consumers areilliquid and in need of cash at any given time, according to Moebs'“Small Cash Market,” study of March, 2012.

Many consumers also are confused and concerned about overdraftfees and practices, according to a report by the Safe CheckingProject of the Pew Charitable Trusts.

“The Pew report emphasizes consumers' need for more informationto make decisions on their checking account, while the CFPB appearsfocused on price enforcement,” Moebs stated. “Regulators, tradegroups, legislators, advocates and financial institutions willcontinue to address these challenges.”