Potential Impact of Legislation to Eliminate Payday Loans
The revised Regulation
E, effective July 1, 2010, will reduce bank and credit union overdraft income
anywhere from my estimate $8 billion to higher estimates up to $15 to $20 billion when debit card and ATM transactions are
eliminated from overdrafts unless customers
“opt-in”.
If payday loans are
eliminated, then banks can recover the lost revenue (I estimate almost $14
billion) by picking up the payday customers and paying more checks into
overdraft.
