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CFPB Overdraft Report Criticizes Credit Union Income And Practices

Thursday, June 13, 2013 - 7:14 AM
From The Credit Union Times:
The CFPB’s overdraft report released Tuesday contained some unflattering statistics related to credit union overdraft income.

According to the report, while bank and thrift service charges on deposit accounts have declined since 2008, credit union fee income has increased by 15%.

Because credit union fee income as reported to the NCUA includes several sources, the report said, defining how much comes from overdrafts and not-sufficient-funds charges is difficult.

The CFPB sourced Strunk & Associates as saying NSF and overdraft fees contributed 11.6% of credit union 2012 operating revenues, compared with 6.9% of bank and thrift revenue during the same period.

However, Strunk also told the CFPB that NSF and overdraft fees accounted for 51% of credit union fee income in 2012, compared with 78% for community banks and thrifts. Large banks report a small percentage of income from NSFs and overdrafts, the report said, because they serve more large commercial accounts than do small community-based institutions.

 

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