Overdraft

FinHealth Spend

Responding to Reform: Overdraft in 2023

After pivotal reforms in 2022, this FinHealth Spend Product Spotlight sheds light on the state of overdraft fees today, how consumers use overdraft, and potential implications for financial institutions and policymakers.

FinHealth Spend

Overdraft Trends Amid Historic Policy Shifts

Overdraft and non-sufficient funds (NSF) fees remain a reality in America’s modern banking system, but the landscape is rapidly evolving. This FinHealth Spend Product Spotlight sheds light on the state of overdraft today, the consumers who use it, and potential implications for financial institutions and policymakers.

Dodging the Overdraft Bullet (So Far)

The economic shutdown and mandatory lockdowns forced many people to limit discretionary spending on retail, food, and entertainment, while stimulus checks and increased unemployment benefits improved financial health in the short term. This aided in a slow down of overdraft.

Technology is Making Parking Tickets Obsolete. Are Overdrafts Next?

Frequent debit card use makes it difficult to keep a diligent check register that accounts for pending payments. Behaviorally informed personal finance apps and smart checking account features have already begun to remove some of the uncertainties posed by recurring cash management challenges, just as smart meters have taken much of the gambling out of parking.

The Riddle of Overdrafting

Much about overdrafting behavior remains a mystery. Given the small amounts and short periods by which overdrafts occur, why aren’t many of them avoidable?