It is estimated that checking account holders in Massachusetts paid more than $990 million in non-sufficient funds (NSF)/overdraft program (ODP) fees in 2008, resulting in more banks and credit unions dependent on these fees for income, according to new research by Bretton Woods Inc., a bank strategy consulting firm.
On average, Bay Staters paid $442.95 per household in NSF/ODP fees in 2008. In total, residents spend 0.6 percent of their median household income on NSF/ODP fees.
"It’s becoming very clear that banks are increasingly reliant on fees resulting from overdrawn checking accounts for income," said bank strategist G. Michael 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."
Bank and credit union income from NSF and ODP fees exceeded $37 billion across the country. NSF/ODP fee income by state ranges from almost $73 million in Alaska to $4.07 billion in California.
