The overdraft time bomb
November 9, 2009 | federal legislation, industry, regulation, research | Comments (0)From a speech given at a banking conference in New Jersey:
At 44.5% of all banks and credit unions, overdraft income exceeds net income, Nicholas J. Ketcha Jr., an executive managing director at the consulting firm FinPro Inc., told bankers at his company’s annual conference Thursday in Mountain Lakes, N.J.
He said that the political pressure to drastically limit such fees is intensifying and that community banks – which have much to lose – are failing to effectively respond to the rhetoric in Washington.
“I’ve always said overdraft protection programs were a timebomb waiting to go off,” said Ketcha, a former director of supervision at the Federal Deposit Insurance Corp. “Well, that timebomb went off.”
Banks are mishandling this. If they would agree to simple disclosure and complete transparency, they could mitigate the political hostility.
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