ST. SIMON’S ISLAND, Ga. (1/15/09)--As their earnings undergo more pressure due to the economy, financial institutions are becoming more reliant on fees from non-sufficient funds (NSF) and overdrawn checking accounts, according to new research. Financial institutions collected $37 billion in NSF and overdraft protection (ODP) fees in 2008, a significant increase since 2004, according to Bretton Woods, a Georgia-based bank strategy consulting firm. The study cites Bankrate.com data showing a 7% increase of the fees from 2005 to 2008. Nationally, the average household has more than 12 overdraft transactions per year and pays $368 per year in fees, said the study. The average NSF fee is $28.95. Roughly 20.2 million households with banking accounts account for most (1.02 billion) of the non-sufficient funds. These more “active” households paid $1,472 in annual NSF fees. Not only did the fees increase, but the number of debits presented against insufficient funds soared to 1.28 billion, an increase of 16.3% in the past three years, according to the study. The average U.S. household with a banking account incurs 12.7 NSF fees per year, according to the study, which counted 1.28 billion separate check and electronic NSF item last year. For banks, 74% of reported service fee income comes from NSF/ODP. Bretton Woods estimated that 80% of what little fee income credit unions do charge comes from NSF fees. Banks’ fees, however, are more diverse and cover a range of other types of fees. Credit unions, because of policies such as not charging for ATM transactions, limit fee income to a narrower field, which includes recouping costs of bounced checks. According to the data in the report, banks’ fees in 2008--based on data from the Federal Deposit Insurance Corp.—were more than six times that of credit unions’ fees—based on data from the National Credit Union Administration.