LAKE BLUFF, Ill. – Further evidence that overdraft income is coming back for financial institutions: overdraft revenue crept up in the third quarter of 2012 according to Moebs $ervices.
Overall, on an annualized basis, overdraft revenue was $31.1 billion for banks, thrifts and CUs. Following the Fed’s Reg E Opt-In regulation for debit card and ATM overdrafts in 2010, overdraft fee revenue fell to a low of $29.5 billion in the third quarter of 2011, and $31 billion in the first quarter of 2012. “The $31.1 billion annualized number still represents a loss of $6.5 billion from the peak of $37.6 billion in the third quarter of 2008,” said Michael Moebs, economist and CEO at Moebs $ervices. “From the second quarter of 2012, banks increased overdraft revenue .8%, thrifts stayed the same, and credit unions increased 1.8%.”
In September after completing an OD survey of 2,700 FIs, Moebs reported that ending in June 2012, CUs enjoyed their best 12-month period for OD revenue in their history, collecting $5.5 billion in overdraft revenue. Previously, the best 12-month period (ending June 30, 2010) was $5.3 billion.