Bretton Woods Inc - Bounced check/overdraft fees paid by state

Because you write about state-specific issues, thought you may like to see a new report that details the amount of bank and credit union NSF/ODP fees paid by consumers in each state.

 

http://news.prnewswire.com/ViewContent.aspx?ACCT=109&STORY=/www/story/01-12-2009/0004953295&EDATE=

 

 

Banks and Credit Unions Collect $37 Billion in Fees Annually on Overdrawn Checking Accounts

 

 

 

 

 

Average U.S household faces more than 12 overdraft transactions a year

 

ST. SIMON'S ISLAND, Ga., Jan. 12 /PRNewswire-USNewswire/ -- New research by Bretton Woods Inc., a bank strategy consulting firm, details, by state, the amount in overdraft protection and non-sufficient fund fees collected by banks and credit unions in 2008. The research by bank strategist G. Michael Flores reveals the amount in fees paid by the average household with a checking account and discusses how banks and credit unions are more dependent on these fees for income.

 

"It's becoming very clear that banks are increasingly reliant on fees resulting from overdrawn checking accounts for income," said Mr. Flores. "Nationally, the average household now has more than 12 overdraft transactions per year and pays $368 per year in fees. We see no reason for this trend to change. Bounced check fees and overdraft protection will have a larger and larger financial impact on households."

 

Read the full report at http://bretton-woods.com/452/18901.html

 

Key Findings:

 

Fee Income

 

Bank and credit union income from non-sufficient funds (NSF) and overdraft program (ODP) fees exceed $37 billion.

NSF/ODP fee income by state ranges from nearly $73 million in Alaska to $4.07 billion in California.

 

NSF/ODP Cost per Household

 

The national annual NSF cost per household with checking accounts is approximately $368.

Active households (defined as the 20.2 million households with bank or credit union accounts who write the majority of NSF items) pay $1,472 in annual NSF fees.

 

NSF/ODP Transactions

 

The average United States household with a banking account incurs 12.7 NSF fees per year.

Bank and credit union data used in Bretton Woods' modeling determined 1.28 billion separate check and electronic NSF items.

An estimated 20.2 million households with bank or credit union accounts write the majority of NSF items (1.02 billion) incurring $29.7 billion in NSF fees or approximately $1,472 in fees per active household.

 

State-by-State Analysis

 

The national annual NSF/ODP cost per household with checking accounts is approximately $368. The chart below details the estimated amount of NSF/ODP fees, in millions, collected by credit unions and banks in individual states. Using California as an example, it is estimated that checking account holders paid more than $4.07 billion in NSF/ODP fees in 2008. When you consider the number of households with checking accounts in California, it is estimated that, on average, Californians paid $366.05 per household in NSF/ODP fees in 2008. In total, Californians spend 0.6 percent of their median household income on NSF/ODP fees.

 

Adjusted Calculations

Total % of Adjusted Adjusted NSF NSF per

Deposits Total NSF Income $$/Banked HH HH/Median

(000) (000) HH Income

State Name

Alabama 76,561,000 1.1% 409,142 256.64 0.6%

Alaska 13,660,000 0.2% 72,999 335.72 0.5%

Arizona 78,663,000 1.1% 420,375 198.75 0.4%

Arkansas 47,148,000 0.7% 251,959 261.40 0.6%

California 762,774,000 11.0% 4,076,267 366.05 0.6%

Colorado 83,140,000 1.2% 444,300 263.70 0.4%

Connecticut 83,201,000 1.2% 444,626 362.21 0.5%

Delaware 176,862,000 2.5% 945,151 3,139.04 5.1%

District

of Columbia 23,438,000 0.3% 125,253 576.54 1.1%

Florida 380,282,000 5.5% 2,032,228 307.75 0.6%

Georgia 184,318,000 2.6% 984,996 315.91 0.6%

Hawaii 26,179,000 0.4% 139,901 343.63 0.6%

Idaho 17,228,000 0.2% 92,066 184.24 0.4%

Illinois 344,624,000 5.0% 1,841,672 431.11 0.7%

Indiana 90,638,000 1.3% 484,370 225.91 0.4%

Iowa 60,108,000 0.9% 321,217 303.15 0.6%

Kansas 57,869,000 0.8% 309,252 325.73 0.6%

Kentucky 64,391,000 0.9% 344,106 230.44 0.5%

Louisiana 72,513,000 1.0% 387,510 274.07 0.7%

Maine 19,529,000 0.3% 104,363 212.26 0.5%

Maryland 96,614,000 1.4% 516,306 268.88 0.4%

Massachusetts 185,324,000 2.7% 990,372 442.95 0.6%

Michigan 157,224,000 2.3% 840,206 243.59 0.4%

Minnesota 101,115,000 1.5% 540,359 291.57 0.5%

Mississippi 45,454,000 0.7% 242,906 261.14 0.7%

Missouri 110,725,000 1.6% 591,715 288.56 0.6%

Montana 15,526,000 0.2% 82,971 241.46 0.6%

Nebraska 38,849,000 0.6% 207,609 331.49 0.7%

Nevada 199,793,000 2.9% 1,067,694 1,216.43 2.1%

New Hampshire 22,988,000 0.3% 122,848 263.85 0.4%

New Jersey 227,192,000 3.3% 1,214,115 426.41 0.6%

New Mexico 22,304,000 0.3% 119,193 180.11 0.4%

New York 759,022,000 10.9% 4,056,216 658.92 1.1%

North

Carolina 219,477,000 3.2% 1,172,886 376.10 0.7%

North Dakota 15,307,000 0.2% 81,801 357.35 0.8%

Ohio 227,825,000 3.3% 1,217,497 306.31 0.6%

Oklahoma 62,990,000 0.9% 336,619 276.52 0.6%

Oregon 49,162,000 0.7% 262,722 197.58 0.4%

Pennsylvania 271,747,000 3.9% 1,452,217 329.57 0.6%

Rhode Island 29,587,000 0.4% 158,113 430.96 0.8%

South

Carolina 66,549,000 1.0% 355,638 235.98 0.5%

South Dakota 74,885,000 1.1% 400,186 1,486.10 3.2%

Tennessee 104,774,000 1.5% 559,913 263.78 0.6%

Texas 484,231,000 7.0% 2,587,732 356.03 0.7%

Utah 229,330,000 3.3% 1,225,540 1,636.63 2.7%

Vermont 9,949,000 0.1% 53,167 235.67 0.4%

Virginia 200,372,000 2.9% 1,070,789 400.36 0.6%

Washington 112,331,000 1.6% 600,297 264.40 0.4%

West Virginia 26,889,000 0.4% 143,695 216.86 0.6%

Wisconsin 114,838,000 1.7% 613,695 310.96 0.6%

Wyoming 11,052,000 0.2% 59,062 311.61 0.6%

TOTAL $6,956,551,000 100.0% $37,175,830 368.51 0.8%

 

Note: There are anomalies in states such as Delaware, Nevada, South Dakota and Utah, due to how data is reported to FDIC and NCUA.(1)

 

NOTES:

 

(1) Since FDIC and NCUA report data by the financial institution's headquarters, service charge income is skewed for certain states that headquarter large bank holding companies (e.g. North Carolina and New York). To adjust for this skewing, Bretton Woods obtained the deposits by state (FDIC reports these numbers based on the branches residing in the state) and calculated the ratio of states' deposits to total deposits in the United States. This ratio was then applied to the service charge income to more reasonably determine the NSF/OD income and number of NSF items at the state level.

 

 

 

 

 

 

 

 

SOURCE Bretton Woods, Inc.