What question did this study set out to answer?

Investigate the relationship between bank competition and overdraft fee revenue in the U.S. retail deposit market.

Seeking overdraft fee revenue: the consequences of bank competition

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Evaluates how bank competition affects overdraft fee revenue, indicating potential risks for consumers.

Investigate the relationship between bank competition and overdraft fee revenue in the U.S. retail deposit market.
Analyzed cross-sectional data from 579 U.S. commercial banks with over $1 billion in assets.
Used the Herfindahl–Hirschman Index to measure competition.
Employed ordinary least squares regression and instrumental variables estimation for analysis.
Higher competition correlates with significantly increased per-account overdraft fees.
A 10% decline in the HHI results in a 1.3% increase in overdraft fees, equating to a $153 million annual rise.
Increased competition does not affect other types of deposit fees.

Bae et al. (2026) studied this question.

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View Full Paper

Ask AI

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Authors

Evaluates how bank competition affects overdraft fee revenue, indicating potential risks for consumers.

Investigate the relationship between bank competition and overdraft fee revenue in the U.S. retail deposit market.
Analyzed cross-sectional data from 579 U.S. commercial banks with over $1 billion in assets.
Used the Herfindahl–Hirschman Index to measure competition.
Employed ordinary least squares regression and instrumental variables estimation for analysis.
Higher competition correlates with significantly increased per-account overdraft fees.
A 10% decline in the HHI results in a 1.3% increase in overdraft fees, equating to a $153 million annual rise.
Increased competition does not affect other types of deposit fees.

Bae et al. (2026) studied this question.

View Full Paper

Ask AI

Bookmark