Consumers on course to save $1 billion in NSF fees annually, but some banks continue to charge these fees | Consumer Financial Protection Bureau

In recent months, a number of large banks have announced that they are eliminating non-sufficient fund (NSF) fees on their checking accounts. This is a positive development. We estimate that these changes mean that consumers will pay about 50% less in these fees each year, an annual savings of about $1 billion.

But many banks are continuing to charge these fees, which consumers incur when the bank returns a check or electronic payment unpaid after determining that the account lacks sufficient funds. Consumers receive no service at all in exchange for this fee. Indeed, NSF fees intensify financial distress for consumers, who often are already at their financial edge and who will often also be hit by the fee merchants charge when a consumer’s payment bounces. NSF fees average $34 each, even as any marginal cost to the institution to return a payment is likely exceedingly low. The Bureau is closely scrutinizing whether and when charging these fees may be unlawful.

Read more about which banks are and are not charging NSF fees, and find updates on a range of bank overdraft practices.