CFPB recently analyzed the non-sufficient fund (NSF) fee practices of a number of banks and credit unions.1 NSF fees are charges that some financial institutions impose when they decline to make a payment from a consumer’s account, like a check or electronic authorization, after determining the account lacks sufficient funds. NSF fees are distinct from overdraft fees, which financial institutions charge when they pay, rather than decline, a payment when the account lacks sufficient funds. CFPB’s analysis found that—
- Nearly two-thirds of banks with over $10 billion in assets have eliminated NSF fees.2
- Nearly three-fourths of the banks that earned the most in overdraft/NSF fee revenue in 2021, including 27 of the top 30 earners, have eliminated NSF fees.
- Among credit unions with over $10 billion in assets, 16 of 20 continue to charge NSF fees, including four of the five largest.
CFPB used this analysis to estimate the resulting reduction in NSF fee revenue over the past several years. In their call reports, banks over $1 billion in assets are required to report their combined overdraft/NSF fee revenue separately from other deposit account service charges.3 Based on CFPB’s prior work, CFPB estimates that NSF fee revenue alone has typically comprised approximately 19% of combined overdraft/NSF fee revenue.4 Based on CFPB’s analysis and applying this assumption, CFPB estimates—
- Among banks with over $10 billion in assets, 97% of NSF fee revenue has been eliminated.
- Among the 75 banks earning the most overdraft/NSF fee revenue in 2021, 95% of NSF fee revenue has been eliminated.
- CFPB estimates that, as a result of the elimination of NSF fees at these banks, consumers are saving almost $2 billion annually on a going forward basis.5
Generally, larger banks have been more likely to eliminate NSF fees. All banks with over $75 billion in assets and all but seven of the 63 banks with over $25 billion in assets have eliminated NSF fees. Table 1 below shows bank NSF fee practices summarized by asset size. This table is followed by Tables 2, 3, and 4, which show NSF fee practices of the individual 75 banks earning the most in overdraft/NSF fee revenue in 2021, of individual banks with over $10 billion in assets, and of individual credit unions with over $10 billion in assets, respectively. CFPB will continue to monitor NSF fee practices in the market.
Table 1: NSF fee practice of banks with over $10 billion in assets, grouped by asset size
Table 2: NSF fee practice of the top 75 reporters of overdraft/NSF fee revenue in 2021
*MUFG Union Bank was acquired by U.S. Bank in December 2022, and its deposit accounts transitioned to U.S. Bank in May 2023. According to U.S. Bank’s publicly available information, it has eliminated NSF fees including on accounts transitioned from MUFG Union Bank.
Table 3: NSF fee practice of banks with over $10 billion in assets
*MUFG Union Bank was acquired by U.S. Bank in December 2022, and its deposit accounts transitioned to U.S. Bank in May 2023. According to U.S. Bank’s publicly available information, it has eliminated NSF fees including on accounts transitioned from MUFG Union Bank.
