Reg E Overdraft Opt-in


It's
hard to believe, but last Wednesday marked the two year anniversary of the
Federal Reserve's infamous Regulation E opt-in regulation for debit card and
ATM overdrafts. Almost a year later (July 1, 2011), the FDIC issued their
controversial overdraft guidance.

So
how has the industry fared since then? In the third quarter of 2010, annualized
industry income from all overdraft revenue was some $33.9 billion. Revenue
decreased by some $4.4 billion just a year later.  Through the first
quarter of 2012, the industry appears to be rebounding slightly as OD revenue
is estimated to reach $31.0 billion by year-end.

The
average national price of overdrafts was $27.66 nationally in June of 2010 and
today it has risen slightly to $27.94 - an increase of 1%. The Consumer Price
Index (CPI) has risen 4.9% during the same period.

So
what's the takeaway?  It is clear that consumers continue to rely on the
overdraft safety net as a convenient and useful financial tool, even while
regulators continue to search for ways to "fix" the overdraft
"problem."