ABA Statement on CFPB Overdraft Research

“The research released today by the CFPB paints an unrecognizable picture of the largest, most diverse financial services marketplace in the world. The United States is home to nearly 10,000 banks and credit unions, and an ever-expanding array of fintech providers who would vigorously contest the assertion that there is a lack of competition or choice for consumers. Consumers enjoy a wide range of choices when it comes to financial products and services, including overdraft protection. Banks across the country provide overdraft-free account options, including Bank On-certified accounts available at institutions making up more than 50% of the U.S. deposit market share. Indeed, as the CFPB's own research shows, overdraft and non-sufficient fund fees fell by 26.2% percent in 2020.

“At the same time, surveys show a strong majority of consumers appreciate and value overdraft protection, and many are choosing banking products that provide overdraft coverage. A recent national survey conducted by Morning Consult revealed that 9 in 10 U.S. adults find their bank’s overdraft protection valuable, and that 3 in 4 were happy their payment was covered when overdraft protection was used. Notably, the Morning Consult survey also shows that a strong majority of consumers believe it is reasonable for banks to charge for overdraft protection.

“Banks remain committed to ensuring their customers understand and make informed choices about their overdraft options. Under federal rules, customers can only receive debit card and ATM overdraft protection by opting in, and they can opt out at any time. Banks provide customers with multiple tools to help them manage their accounts and avoid overdrawing, including text alerts about low balances and the ability to monitor their accounts digitally. A more comprehensive analysis by the CFPB would have provided this important context and served to better inform consumers about the choices available to them. Instead, the research released today unfortunately uses dated information to unfairly criticize banks for providing services many Americans appreciate and value." 

Editor's Note: According to a national survey conducted by Morning Consult on behalf of the American Bankers Association in October:

• 9 in 10 adults (90%) find their bank’s overdraft protection valuable.
• 1 in 4 adults say they have paid an overdraft fee in the past year.
  • People across income brackets are equally likely to have paid an overdraft in the past year.
  • Post-grads are more likely to overdraw than regular college degree or those without a college degree.
• Among adults who have paid an overdraft fee, 3 in 4 say their bank covered the payment that caused it.
• U.S. adults overwhelmingly say they were happy the payment was covered. (72%)
• Nearly 1 in 4 people (23%) have intentionally overdrawn their bank account to cover an expense.
• A strong majority (62%) say it is reasonable for banks to charge fees for overdrafts (vs. only 21% saying unreasonable).
• A large plurality of consumers are opposed to any government proposal that would prevent banks from offering overdraft protection programs (48% oppose vs. 32% support; 30% strongly oppose vs. 14% strongly support).

About the Survey
This poll was conducted by Morning Consult on behalf of the American Bankers Association from October 1-3, 2021, among a national sample of 2,201 adults. The interviews were conducted online and the data were weighted to approximate a target sample of adults based on age, race/ethnicity, gender, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.