Posted on 09/27/2011 8:28:57 AM PDT by yorkie
Free checking is going the way of the free checked bag.
Only 45% of non-interest bank checking accounts are free, down from 65% in 2010 and 76% two years ago, according to a survey released Monday by Bankrate.com. Fees, meanwhile, are rising: The average monthly fee for a non-interest account is $4.37, up 75% from a year ago.
Banks are adding fees to recover from new regulations that could cost billions in lost revenue, says Greg McBride, senior financial analyst for Bankrate. Starting Oct. 1, the maximum fee banks can charge retailers when customers pay with a debit card is 21 cents, down from an average of 44 cents. Last year, the Federal Reserve Board prohibited overdraft fees unless customers sign up for the service.
"When the government intervenes in markets and eliminates a source of income, a bank, like any other business, has to find some way to make up that lost income," says Nessa Feddis, senior counsel for the American Bankers Association.
(Excerpt) Read more at abcnews.go.com ...
That’s why we have credit unions.............
what competition. All banks screw customers the same way.
If banks feared competition they would not be universally nickle and diming customers.
Having worked in banking most of my life...I can tell you that checking accounts are a lot of work for a bank. It’s a lot better now with computers and such but it still costs the banks alot to maintain those “free” accounts.
I love the way banks’ are to blame instead of the government and their over-regulation!
Capital One is the only one which I've found who pays somewhat decent interest from dollar #1 on checking accounts and doesn't charge fees. They do make you buy your own paper checks after the initial supply of two books are gone, but so what? Paper checks last forever now because I seldom write them.
SunTrust starts charging for debit card use on November 10. They go to the chopping block at that time as well.
EXACTLY....same with HEALTH CARE!
Fortunately, the CD matures in a few days, so we're off and running......screw that sh*t.
Wells Fargo is ‘playing’ with charging customers for debit card usage, also.
I wish there was a Credit Union in my city, but there is not.
I have had an account with Wells Fargo for over 30 years, and was treated like a criminal, when I deposited a check last week with a small amount of ‘cash back’. I signed the check in front of the teller, and showed her my check book.
She still wanted two photo ID’s. (And my balance was way over the amount I was withdrawing as cash.)
I closed out my savings account with them, because they started charging me for it.
Now, I will probably move my account to a smaller bank.
Remember when you got a free toaster for opening a savings account? The world moved on...
If you aren’t already in a credit union..join one and move your checking there. I can’t say enough good about our credit union and all the services they provide. If you really want an old fashion bank relationship..it is the way to go. Ours even has a service that receives all our mail and bills when we hit the road in our RV..they pay bills and forward the mail. We pay for that service, but it is really great.
Remember when you got a free toaster for opening a savings account? The world moved on...
Well my banker and I did plant and hoe tobacco together as kids, so I have know her a little while. But then it is not a mega bank, and only has about 30 locations.
Wells Fargo is canceling their visa extras participation to cut costs
This is a direct result of Sen Durbin’s amendment to the Dodd-Frank bill that they said would stop the evil bankers from taking advantage of the poor folk. Durbin was lobbied hard by the retailers and slipped his bomb in there - slashed the debit card transaction fees that merchants pay the banks to process the transactions. Of course, now the consumers pay more in the end, which seems to always be the result of left wing economic meddling.
When I was still in business, I deposited a customer payment check for $25K with the old Trust Company bank in Atlanta. When it failed to show up on my statement, I called the branch manager. After he checked their records, he claimed there was no evidence of the deposit.
When I told him I WAS HOLDING IN MY HAND THE DEPOSIT RECEIPT, you could have heard a pin drop on the other end. A chill in his voice, he told me to bring it over and they’d take care of it. When I got there, he was CLEARLY PISSED that I had the receipt. Not sure it was because his people screwed up or that he’d have to tell his wife or mistress that the cruise to the Riviera was off.
Once the 25K was on the books, we moved to another bank.
We’re now moving our personal account from Wells-F**kyou to a credit union.
Exactly. Why are all these people taking it out on the banks instead of the democrats? I guess we are screwed as a nation. Most of these posts on this thread sound like Democratic Underground message boards.
Alarmist BS. Are banks jacking around with accounts and fees - yes. But there is absolutely no prohibition against overdraft fees. I believe whoever wrote this article either is lazy, or just didn't actually investigate what the heck he was writing (or both).
What IS prohibited is the automatic registering checking customers with "overdraft protection" - 100% of existing customers (even if they already had specifically opted-in earlier) had to be contacted and given the option of this "protection". What happens is - instead of your bank just covering your over-draft - thus paying the check or debit, then billing you a hefty fee for doing so, the band now just returns the check/reverses the debit - and still legally charging you a fee. Of course - now you have a fee and possibly even hot check charges from whoever you wrote that check to! Also - that debit card transaction for dinner... your account shows $1 less available than the charge (due to other pending pre-authorizations/holds/or your own careless accounting) - and the transaction now likely will be rejected.
Where consumers are protected - if the bank allows the transaction or check to clear - they can't go back and charge you a fee for overdraft if you didn't specifically opt IN to said service. But that isn't likely to happen -
I have a good friend who actually writes the software banks use to do the processing and accounting - and he has, for the last 2 years, been buried in work rewriting code and routines for the specific bank he contracted to - as they attempt to maximize profits and fees with all these fairly recent regulations and laws.
Which is worse?
You write a check - and you don't have the funds to quite cover it in your account and either:
A. You have overdraft protection, and thus your bank pays the overdraft, then charges you anywhere from $15-30, depending on specific bank's policies. OR-
B. You have opted-out of overdraft protection, your bank returns the check and charges you $15-30 for the effort, then whoever you wrote the check to charges you anywhere from $15-50 on top of the face value of the check - and may even turn you over to the prosecuting attorney for prosecution for hot check...
Now - one thing that HAS affected banks - their "dirty little secret" - is that until recent regulations, they would selectively sort the order of debits to your account. This is an illustration of the old way many banks would do daily transactions:
Your actual balance in account is $500
This morning, 5 checks tried to clear the bank (in no particular chronological order):
$485
$5
$10
$35
$7
Now - the logical order of processing (at least in my mind) would be the ACTUAL order they were received in (all checks have a time/date stamp in processing). But instead, banks were paying the largest first:
$475, 35, 10, 7, 5... so, instead of getting hit with only 1 OD charge by clearing the smaller checks first,banks were clearing the biggest first - which in this case would result in one check paid with no penalty, then 4 OD charges (or an average of $120 in charges). LOTS of profit - and this was being done, even if the checking account was linked to a savings account that DID have the funds to cover the checks -
There were a bunch of still-unresolved monkey wrenches thrown in to the mix with the debit transaction rules (both auto-debits like bill paying and debit card/ATM use).
But what it comes down too - a huge revenue source for banks is the fees they charge for every little thing, and the regulations just put a leash on the crazy lengths many were going to in maximizing those fee "opportunities". Any bank that can honestly claim to be "losing" money because of the regulations was in some pretty horrid financial shape anyway. Are they raking in less revenue from fees - maybe so.
The average checking account balances customers maintain are part of a bank's reserves and supports the bank's ability to make loans.
Do you think banks would like to get rid of all their checking accounts? It would eliminate the expense of servicing the accounts.
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