Study of Bank Overdraft Programs
Author | : Barry Leonard |
Publisher | : DIANE Publishing |
Total Pages | : 120 |
Release | : 2010-04 |
Genre | : Business & Economics |
ISBN | : 1437926738 |
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Author | : Barry Leonard |
Publisher | : DIANE Publishing |
Total Pages | : 120 |
Release | : 2010-04 |
Genre | : Business & Economics |
ISBN | : 1437926738 |
Author | : Federal Deposit Insurance Corporation |
Publisher | : |
Total Pages | : |
Release | : 2008 |
Genre | : Banks and banking |
ISBN | : |
Author | : Michael Flores |
Publisher | : |
Total Pages | : 23 |
Release | : 2018 |
Genre | : |
ISBN | : |
The Consumer Financial Protection Bureau (CFPB) released its initial analysis of bank overdraft programs in a June 2013 white paper. We review the report and provide commentary on its methodology, its preliminary conclusions, and gaps in its analysis. We provide a synopsis of findings from previous third-party analyses to lay the foundation for our response, and then we follow the paper's organizational structure as we discuss specific points it makes. We also identify the larger policy questions of access to credit, alternative sources of credit, and the economic benefit attained by the use of overdrafts. These questions must be addressed before the bureau can make any findings of consumer harm that would justify new regulation and the resultant unintended consequences of limiting options to the consumers the CFPB is structured to protect.
Author | : G. Michael Flores |
Publisher | : |
Total Pages | : 46 |
Release | : 2013 |
Genre | : Consumer protection |
ISBN | : |
Author | : United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs |
Publisher | : |
Total Pages | : 72 |
Release | : 2010 |
Genre | : Banks and banking |
ISBN | : |
Author | : Xiao Liu |
Publisher | : |
Total Pages | : 54 |
Release | : 2020 |
Genre | : |
ISBN | : |
In 2012, consumers paid $32 billion in overdraft fees, representing the single largest source of revenue for banks from demand deposit accounts during this period. Owing to consumer attrition caused by overdraft fees and potential government regulations to reform these fees, financial institutions have become motivated to investigate their overdraft fee structures. Banks need to balance the revenue generated from overdraft fees with consumer dissatisfaction and potential churn caused by these fees. However, no empirical research has been conducted to explain consumer responses to overdraft fees or to evaluate alternative pricing strategies associated with these fees. In this research, we propose a dynamic structural model with consumer monitoring costs and dissatisfaction associated with overdraft fees. We apply the model to an enterprise-level data set of more than 500,000 accounts with a history of 450 days, providing a total of 200 million transactions. We find that consumers heavily discount the future and potentially overdraw because of impulsive spending. However, we also find that high monitoring costs hinder consumers' effort to track their balance accurately; consequently, consumers may overdraw because of rational inattention. The large data set is necessary because of the infrequent nature of overdrafts; however, it also engenders computational challenges, which we address by using parallel computing techniques. Our policy simulations show that alternative pricing strategies may increase bank revenue and improve consumer welfare. Fixed bill schedules and overdraft waiver programs may also enhance social welfare. This paper explains consumer responses to overdraft fees and evaluates alternative pricing strategies associated with these fees.
Author | : |
Publisher | : World Bank Publications |
Total Pages | : 108 |
Release | : 2009-01-01 |
Genre | : Business & Economics |
ISBN | : 0821377558 |
Banking the Poor explores level and determinants of financial access in 54 countries, mostly in Africa. It collects information from two sources: central banks and leading commercial banks in each surveyed country. It explores associations between countries' banking policies and practices and their levels of financial access, measured in terms of the numbers of bank account per thousand adults. It builds on the previous work measuring financial access through information from regulators, from banks, and also from users' perspectives in household surveys.
Author | : United States. Congress. House. Committee on Financial Services |
Publisher | : |
Total Pages | : 192 |
Release | : 2010 |
Genre | : Banking law |
ISBN | : |
Author | : United States. Congress. House. Committee on Banking and Financial Services. Subcommittee on Financial Institutions and Consumer Credit |
Publisher | : |
Total Pages | : 238 |
Release | : 2009 |
Genre | : Business & Economics |
ISBN | : |
Author | : Alicia Puente Cackley |
Publisher | : DIANE Publishing |
Total Pages | : 60 |
Release | : 2011-04 |
Genre | : Reference |
ISBN | : 1437980791 |
In the U.S., payday lending (PL) is a $40 billion a year industry. A PL is a small-dollar loan -- from $100 to $500 and re-payable in about two weeks. Consumers can pay fees of $15-20 for every $100 borrowed. In 2006 the DoD reported on predatory lending, incl. PL, and found that these loans impacted military readiness and troop morale. Concerns were raised about PL to federal employees in law enforcement and national security positions at four components. This report examined: (1) how these federal law enforcement agencies become aware of employees who are potential security risks due to financial problems, including PL; and (2) various alternatives to PL. Charts and tables. This is a print on demand edition of an important, hard-to-find report.