When the new credit and overdraft laws take into effect, many banks are expecting to lose revenue. Therefore, it should come as to surprise that many are already looking for ways to make up for the loss. In place of sneaky overdraft fees, several banks are looking to create new fees on checking accounts, and additional banking options for additional revenue.
MSN Money posted an interesting article alerting consumers of these changes. Reportedly, banks will begin bombarding customers with these new fees throughout 2010 in preparation for the new law that will take affect in July.
For some customers, that could mean the end of free checking accounts.
“Banks, just like airlines and local governments, need to fill the revenue gap,” Greg McBride, the senior analyst for Bankrate.com, told Smart Money last year. “They’re looking to fee increases to do that.”
A 2008 study by the Federal Deposit Insurance Corporation reported that 75% of checking account holders paid nothing for the service. The other 25% paid minimum balance fees, overdraft fees and other service charges -- subsidizing free checking for everyone else, Consumer Affairs reported.
With banks’ ability to levy some of those charges restricted, expect banks to raise the threshold for free checking, increasing the number of customers who pay something, Consumer Affairs predicts.