Zywicki Research Discussed in CQ Roll Call

A CQ Roll Call article on restrictions on overdraft fees discusses a paper by Professor Todd ZywickiIn the paper, Zywicki and his co-author G. Michael Flores comment on a recent report by the Consumer Financial Protection Bureau on checking account overdraft.


The Flores-Zywicki paper . . . argues that future limitations on overdraft fees would harm smaller and community banks significantly more than larger banks. According to the paper, overdraft fees account for 27 percent of small bank income versus only 12 percent for large banks.

“[I]f debit card overdrafts were restricted or eliminated, then the smallest community banks would experience the greatest negative impact to earnings,” the paper said. “Given that many community banks remain somewhat weak in light of the financial crisis and subsequent regulatory compliance costs, any substantial erosion in overdraft protection revenues would be especially destabilizing.”

Study: Restricting overdraft fees hurts small banks, CQ Roll Call, October 30, 2014. By Eric Naing.

Read the paper