Change to Consumer Overdrafts: Five Questions to Address before July 1st
On November 12th the Federal Reserve announced changes to Regulation E that will substantially impact practices regarding consumer overdrafts. These overdrafts represent $25 - $30 BN per year in depository revenue. Given the recent regulatory and legislative tone, the amendments are not wholly surprising, and most institutions were already considering strategic options for a future without some of these fees. The timeline, however, has come as somewhat of a shock, with substantial change required by July 1, 2010. Depending on your starting point, this change will likely require significant operational effort across communications, product development, technology and risk management - as well as a continued push towards strategic transformation.
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Oliver Wyman's Retail & Business Banking practice advises leading banks, credit institutions, payments companies and investments firms around the world in shaping and implementing business strategies aimed at serving consumer households and small and medium-sized businesses.
