The National Credit Union Administration released a Research Note analyzing overdraft and non-sufficient funds (NSF) fee revenues at federally insured credit unions and how those fees relate to other revenue sources. The analysis indicates that credit unions with higher overdraft and NSF fee income are not offsetting that income through lower fees for other services or better interest rates, and it flags potential concentration risk and safety-and-soundness concerns alongside a disproportionate impact on consumers least able to afford the fees. Using year-to-date revenue data from the first three quarters of 2024, prepared by the NCUA’s Office of the Chief Economist, the note evaluates overdraft and NSF revenues as a share of total revenues. It highlights two observations: higher combined overdraft and NSF fees per member do not appear to coincide with lower per-member fees for other services, and higher combined overdraft and NSF revenues do not appear to be used to subsidize improved interest rates. The Office of the Chief Economist will continue monitoring and analyzing trends in overdraft and NSF fee revenue as additional data become available.
National Credit Union Administration 2025-01-16
National Credit Union Administration publishes research finding overdraft and NSF fee reliance may pose concentration and consumer harm risks
The National Credit Union Administration released a Research Note analyzing overdraft and NSF fee revenues at federally insured credit unions, highlighting potential concentration risk and safety-and-soundness concerns. The analysis reveals that higher overdraft and NSF fee income does not correlate with lower fees for other services or better interest rates, disproportionately impacting consumers least able to afford them. The Office of the Chief Economist will continue monitoring these trends.