--- title: Despite Reforms, Overdraft Fees Are Still Plaguing Low-Income Americans description: Last year, 17% of households with checking accounts were charged an overdraft or NSF fee at least once, according to a new report. authors: - name: Adam Hardy role: Lead Data Reporter url: https://money.com/author/adam-hardy/ bio: Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. Adam’s work has also appeared in Business Insider, Forbes, Nasdaq, The Penny Hoarder, Yahoo! Finance and more than a dozen local and regional newspapers. education: University of South Florida, BA, Magazine Journalism at_money_since: 2021 articles: 497 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - The Penny Hoarder - Forbes Advisor - Creative Loafing - The New York Times - The Washington Post - Bloomberg - Harvard Law School - The Federal Register - National Consumer Law Center - CBS News - Becker's Hospital Review - Business Insider - Mother Jones - The Week - Fortune - The Philadelphia Inquirer - National Association of Student Financial Aid Administrators (NAFSAA) - Education Advisory Board (EAB) - The Institute for College Access & Success (TICAS) - This Morning with Gordon Deal - Empower - Reddit social: - https://www.x.com/hardyjournalism - https://www.linkedin.com/in/hardyjournalism/ editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2023-06-05T18:34:49.000Z' modified: '2024-01-10T14:51:55.000Z' section: Banking tags: - new word_count: 679 canonical: https://money.com/overdraft-nsf-fees-low-income-americans/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Young woman looking over a piece of paper while using a laptop in a living room](https://img.money.com/2023/06/News-Overdarft-Fees-Lown-Income-Americans.jpg) Overdraft and non-sufficient funds fees are disproportionately plaguing low-income households, with some Americans overdrawing their bank accounts 10 or more times a year. Despite recent reforms in the banking industry spurred on by a crusade of [government scrutiny](https://money.com/mortgage-bank-fees-complaints-cfpb/) and [public pressure](https://money.com/dollar-scholar-overdraft-fees/), the fees are still rampant, according to a [new study](https://finhealthnetwork.org/research/overdraft-trends-amid-historic-policy-shifts/) from the nonprofit Financial Health Network, a consumer research organization. These fees are charged when a customer does not have enough money in their account to cover a transaction. In the case of an overdraft, the bank usually allows the transaction to go through but charges the account a fee of about $30. With NSF fees, the transaction typically is declined *and* the fee is charged. [Rohit Chopra](https://money.com/changemakers/rohit-chopra/), director of the government watchdog agency Consumer Financial Protection Bureau (CFPB), has repeatedly [railed against overdraft and NSF fees](https://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-cfpb-director-rohit-chopra-overdraft-press-call/), calling them “exploitative junk fees that can quickly drain a family’s bank account.” They can be a pain for consumers, but they're a moneymaker for financial institutions — as of 2022, banks were bringing in some $10 billion from overdraft and NSF fees, per the Financial Health Network. In recent years, the CFPB has cracked down on banks that heavily rely on the fees as a major source of revenue, leading major institutions like Bank of America, Wells Fargo and CitiBank and many others to change their overdraft policies. Financial Health Network’s study shows that these changes have contributed to a 6% decrease in banks’ revenue from such fees from 2021 to 2022. However, the share of households getting hit with the fees has held steady. ## What the research shows In a report released Thursday, Financial Health Network provides a snapshot of who’s overdrafting — and how often. - The big takeaway: In 2022, 17% of households with checking accounts were charged an overdraft or NSF fee at least once. That’s the same percentage as the previous year, when [banks](https://money.com/best-banks/) and [credit unions](https://money.com/best-credit-union/) raced to overhaul their fee policies for overdrawn accounts. In 2020, that figure was 16%. - Over that same period of time, however, bank revenue from the fees fell 6% — from roughly $10.6 billion in 2021 to $9.9 billion in 2022. - The picture is much more dire for financially vulnerable households, which the Financial Health Network defines as those typically earning $30,000 or less and being saddled with debt. For this group of low-income Americans, nearly half (46%) reported at least one overdraft charge. - Of those low-income households, 35% said they were charged for overdrafting six or more times, while 20% said that happened at least 10 times last year. The nonprofit also asked those who overdrafted several times in 2022 whether they would have preferred to take the hit of a fee so long as the transaction went through or if they would rather the purchase be declined. - Surprisingly, 60% of overdrafters said they would prefer the fee so long as the transaction went through. - The findings suggest that frequent overdrafters strategically overdraw their accounts to get by. Of those who overdraw their accounts at least 10 times a year, 35% told FHN that their last overdraft was intentional. The study was based on a representative survey of more than 5,000 U.S. adult consumers in January. ## The takeaway The federal government’s recent [crackdown on overdraft and NSF fees](https://money.com/citi-eliminating-overdraft-fees/) spurred many popular banks to eliminate or reduce them. According to the Financial Health Network, these reforms have contributed to an industry-wide dip of 6% in revenue that banks and credit unions amass from these fees — even though Americans are still getting hit with those fees at roughly the same rate. Low-income folks in particular are susceptible to the fees, with about 1 in 5 of them getting charged at least 10 times a year for overdrawing their accounts. [Why It's Risky to Keep a Big Balance in Venmo, Cash App or PayPal](https://money.com/keep-money-in-venmo-paypal-risky/) [How the New Debt Ceiling Deal Could Affect Your Wallet, From Student Loans to Food Benefits](https://money.com/debt-ceiling-deal-affect-your-money/) [Debt Free or More Student Loan Payments? These 20 Million Borrowers Await 'Life-Changing' SCOTUS Decision](https://money.com/student-loan-forgiveness-debt-free-borrowers/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/overdraft-nsf-fees-low-income-americans/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Banking", "item": "https://money.com/banking/" }, { "@type": "ListItem", "position": 3, "name": "Bank Accounts", "item": "https://money.com/bank-accounts/" }, { "@type": "ListItem", "position": 4, "name": "Despite Reforms, Overdraft Fees Are Still Plaguing Low-Income Americans" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/overdraft-nsf-fees-low-income-americans/#webpage", "url": "https://money.com/overdraft-nsf-fees-low-income-americans/", "name": "Despite Reforms, Overdraft Fees Are Still Plaguing Low-Income Americans", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-06-05T18:34:49.000Z", "mainEntity": { "@id": "https://money.com/overdraft-nsf-fees-low-income-americans/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/overdraft-nsf-fees-low-income-americans/#breadcrumb" }, "dateModified": "2024-01-10T14:51:55.000Z" }, { "@type": "Article", "headline": "Despite Reforms, Overdraft Fees Are Still Plaguing Low-Income Americans", "articleSection": "Banking", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/06/News-Overdarft-Fees-Lown-Income-Americans.jpg", "width": 1560, "height": 1040, "caption": "News-Overdarft-Fees-Lown-Income-Americans" } ], "author": [ { "@type": "Person", "name": "Adam Hardy", "url": "https://money.com/author/adam-hardy/", "@id": "https://money.com/author/adam-hardy/#author", "description": "Adam Hardy is a lead data journalist at Money, where he frequently reports on financial barriers that affect low-income Americans. 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