How much revenue do overdraft and bounced check fees generate for banks?

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Overdraft and Non-Sufficient Funds Fees Generate Billions in Bank Revenue

In 2019, bank overdraft and non-sufficient funds fees generated an estimated US$15.5 billion (RM73 billion) in revenue for financial institutions. These fees are being scrutinized by the US Consumer Financial Protection Bureau (CFPB) for potentially being unfair and unlawful. The White House has indicated that this regulatory action could lead to the elimination of billions of dollars in such banking fees.
Surprise Overdraft Fees Criticised as Unfair

The CFPB has issued guidance suggesting that surprise overdraft fees are likely unfair and unlawful practices. These fees can unexpectedly catch consumers off guard, particularly when their actions do not reasonably suggest an impending charge. The agency's stance is that such practices may contravene the Consumer Financial Protection Act's prohibition against unfair fees that consumers cannot avoid.
Bounced Check Fees Also Under Scrutiny

Similarly, the practice of charging fees to depositors of bounced checks is also facing scrutiny. The CFPB views this as a penalty against individuals who may not be aware of a bad check being issued. This type of fee is also considered by the agency to potentially violate the Consumer Financial Protection Act due to its unfair and unavoidable nature for the consumer.
Impact on Marginalised Communities Highlighted

President Joe Biden has characterised these fees as "junk fees," asserting that they disproportionately affect marginalised Americans, including low-income individuals and people of colour. He stated that these fees benefit large corporations rather than consumers or working families, and that this situation is now changing. The administration is directing federal agencies to identify and reduce or eliminate such hidden fees across the economy.

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How much revenue do overdraft and bounced check fees generate for banks?

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