WASHINGTON—Consumers value and understand existing overdraft services offered by financial institutions, a new study shows.
A new national survey conducted by Morning Consult on behalf of the American Bankers Association shows that seven in 10 consumers (70%) find their bank’s overdraft protection valuable – as compared with only 14% who do not find it valuable, the ABA Banking Journal reported.
Eight in 10 consumers (80%) who have paid an overdraft fee in the past year were glad their bank covered their overdraft payment, rather than returning or declining payment, and 68% of consumers think it’s reasonable for banks to charge a fee for an overdraft, as opposed to only 23% who think it’s unreasonable, ABA Banking Journal stated in its analysis.
Three in four consumers view overdraft fees as reasonable when considering that large payments like mortgages or rent payments are covered and paid on time (74%) or when considering that customers are protected from late or other penalty fees if payments overdraw a customer’s account (75%).
“The survey, consistent with past national polling, shows that Americans clearly appreciate and understand current overdraft programs,” ABA President and CEO Rob Nichols said. “The CFPB’s misguided rule would put those programs at risk by implementing a government price cap on overdraft fees, making overdraft protection almost impossible to offer. We urge the Senate and the House to nullify this rule and prevent Americans from being forced to rely on less regulated and higher risk nonbank lenders for their short-term liquidity needs.”