However, beginning in August we started to see improvements in all these areas. Income started to recover as data for the month indicated an increase of 20 percent over the May results. Likewise, data for transaction volume, program utilization, as well as waived and refunded fees revealed that client institutions were beginning to see improved results.

When will NSF/OD income return to normal?

As community banks and credit unions continue to face the challenge of maintaining pre-pandemic revenue levels, we are often asked about when to expect a full recovery. Based on an analysis of Call Report data for more than 6,000 financial institutions through the end of June, the average decrease in income for all banks was 34 to 36 percent; for credit unions income decreased an average 28 percent.

And while there is no crystal ball to show us what to expect in the future, we know—based on this data—that JMFA client banks were performing 30.71 percent better in Q1 and 27.92 percent better in Q2 than non-JMFA banks. JMFA credit unions performed 5.68 percent better in Q1 and 6 percent better in Q2 compared to non-JMFA credit unions.

Proactive program management leads to better results

Even in the best of times, our industry partners will acknowledge that maintaining proactive management of every aspect of a fully disclosed overdraft strategy is key to successful program results. With that said, our engagement strategy includes ongoing recommendations to address the changing economic conditions and regulatory expectations. Plus, our implementation and support teams work closely with clients to ensure they have the resources and strategies necessary to strengthen any areas of their program that may be underperforming.