Change is coming to ODP
March 17, 2010 | alternatives, industry | Comments (0)From Bankrate:
A recent study by Bretton Woods Inc., a management consulting firm serving financial institutions found that bank and credit union customers paid over $38 billion in overdraft fees in 2009.
Further, the study projects that the new regulation will cost financial institutions about $7.3 billion in fees.
A return to customer service?
Though a minority of accounts pay the majority of the fees, any strategies to make up the shortfall in fee income will affect a broader swath of the population.
How banks will charge to mitigate the lost revenue remains to be seen, though there are many theories on what will happen.
In advance of the changes, banks are communicating with their customers to convince them to opt in. But its unlikely that they’ll get 100 percent of their clients onboard.
“All evidence from banks and financial institutions is that its a very slow process to get their customers to sign up for something, even things that are in the customer’s best interest,” says Handel.
“Things like electronic statements — they make sense for the consumer but it takes a long time to get acceptance and I think you’re going to find the same thing with this. Banks are going to have a big gap with their income stream and its coming at a difficult time for them,” he says.
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