Session 2 - Reinventing Small Dollar Lending

Overdraft fees are going away, one way or another. 

Good riddance. They are expensive for customers, a terrible customer experience, and have been abused by too many big institutions. But the reality is OD fee income needs to be replaced with something better for customers, and better for financial institutions.

Whether by regulation or market forces, eliminating overdraft fees doesn't solve the fundamental problem: Consumers and small businesses occasionally have the need to spend money they do not yet have in hand. Cash inflows and outflows often have timing differences,  emergency expenses pop up, bills and necessities cannot wait.

Customers are looking to fintechs, pay-day and other alternative lenders, and overdrafts to meet these needs while bank NSF/OD Programs are coming under increasing regulatory scrutiny. Some banks have eliminated all OD fee income, others are eliminating OD services entirely. FIs need to create new products to provide customers with the…