Bankers remain skeptical of economic outlook ARLINGTON, Va., May 1, 2024 /PRNewswire/ -- Fifty-eight percent of bankers would take action to reduce costs or increase revenue elsewhere even if exempt under a new regulatory proposal to restrict overdraft fees, according to a survey of nearly 500 financial executives released today.
In a survey by liquidity management fintech IntraFi, 44% of respondents said if the plan went into effect, they would lower overdraft fees to remain competitive with larger banks, while 35% said they would alter their policies, and 27% said they would raise fees on other banking services. These actions would occur despite the fact that banks with less than $10 billion of assets would be exempt from the Consumer Financial Protection Bureau's plan.
"Even banks that are exempt believe they will need to find additional sources of revenues or potentially limit their current overdraft protection," said Mark Jacobsen, Cofounder and CEO of IntraFi.
The CFPB issued a proposal on Jan. 17 that would limit banks' overdraft fees to $3 or a cost calculated by banks if they show their cost data. The banking industry has largely opposed the plan, arguing it would harm consumers who rely on overdraft protection.
In the IntraFi survey, bankers also said they would be impacted by other pending regulatory proposals, though not to the same extent as the overdraft plan.
Thirty-one percent of bankers indicated their institution would have to replace revenue, eliminate free checking, or take other steps should an October proposal by the Federal Reserve to lower debit interchange fees become final. The central bank's plan also would exempt institutions with less than $10 billion in assets.
Additionally, a small number of banks (17%) are also considering changes as a result of the CFPB's new $8 cap on credit card late fees.
Bankers remain on the fence regarding the economic outlook at their institutions, with approximately half stating economic conditions had remained the same over the past 12 months, and only 16% noting conditions had improved. Looking forward, 34% of respondents said they expect economic conditions to decline over the next 12 months, while 23% predicted they would moderately improve.
IntraFi's first quarter 2024 Bank Executive Business Outlook Survey garnered responses from CEOs, presidents, and CFOs at 496 unique banks across the country. Download the full report.
About IntraFi:
A trusted partner chosen by more than 3,000 financial services companies, IntraFi defines success not by the volume of transactions enabled, but by the quality of relationships formed. The network, established over 20 years ago, connects institutions of all sizes to help participants build stronger relationships with their customers, fund more loans, seamlessly manage their liquidity needs, and earn fee income.
SOURCE: IntraFi