Analysis by Mike Moebs, CEO and Economist of Moebs $ervices (Lake Forest, IL), found that overdraft (OD) revenues at credit unions posted their 25th consecutive annual increase.
Moebs estimated that overdraft revenues at credit unions grew by almost 5 percent in 2017 compared to 3 percent at banks.
According to Moebs, overdraft revenues for all financial institutions were $34.3 billion in 2017, up from $33.3 billion in 2016.
The press release noted credit unions accounted for 19 percent of all overdraft revenues versus 79 percent for banks and 2 percent for thrifts.
However, Moebs cautioned that overdraft prices are no longer price inelastic. According to Moebs, banks are recognizing that overdraft prices are price elastic, but most credit unions have not.
Moebs stated that financial institutions that lower their overdraft prices, especially under $20 per overdraft, will achieve more revenues, more consumers using overdrafts, more checking accounts, and greater profit.
If it wasn't for the fee income some credit unions would have no income at all. Fee 'em to death. Especially fee those that can least afford to pay it. Add insult to injury and call it a Courtesy Pay.
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