You see, the experts at Haberfeld–as do we–disagree with much of the analysis being published about overdrafts, especially from organizations like The Pew Charitable Trust and the Consumer Financial Protection Bureau (CFPB) that are looking to further regulate or even eliminate this service.
Haberfeld questions the validity of the CFPB complaint database, which focuses exclusively on consumer problems, many of which are ill-defined and hard to categorize. Haberfeld's (and our own) analysis, however, is based on research of millions of actual consumer checking accounts, which appears to support our stance that allowing discretionary overdrafts is an important customer service.
Research conducted by both Haberfeld and BSG Financial Group clearly shows:
- Consumers overdraw less often when the price per occurrence goes up.
- Consumers overdraw more often when their banks pay the checks or allow the POS purchases to go through.
- Consumers who have a greater ability to repay their overdrafts, overdraft the most.
The Haberfeld article also points out that while Pew Charitable asserts that one in four “bank account or service” complaints is related to overdrafts, the actual database reveals that 8% of total complaints are about checking accounts, and only 1.65% is defined as “Problems caused by my funds being low."
Haberfeld article provided with permission from Achim Griesel, Chief Operating Officer at Haberfeld Holdings, Inc.