Zywicki on Bank Overdraft Protection

In an American Banker article on bank overdraft protection, Professor Todd Zywicki and co-author G. Michael Flores discuss questions that the Consumer Financial Protection Bureau needs to answer before imposing new regulations.


In recent decades, overdraft protection has emerged as a valuable source of revenue for America's community banks. It promotes free checking and has served as a lifeline for many credit-impaired consumers seeking alternatives to payday lending and pawn shops.

Wise, data-driven policy-making should be aware of the limits of currently available data and the possibility that restricting overdrafts will have unintended consequences. While information and solid empirical study such as the CFPB's admirable analysis are welcome, the agency should be aware that many unanswered questions remain before it should move on regulation in this area.

Overdraft Protection Rules Could Hurt Consumers More Than They Help, American Banker, November 24, 2014. By G. Michael Flores & Todd Zywicki.