This post is from staff writer April Dykman.
Last year Congress passed the massive Dodd-Frank bill as a response to the reckless actions of Wall Street and to establish protections for consumers. But some of the new regulations will cost banks significant revenue, and stories are running rampant on proposals banks are considering to recoup costs — each at the consumer’s expense.
The following are some of the changes that are already taking place at a bank near you, as well as proposed changes banks are considering.
Free checking on the endangered list
Free checking is harder to come by, as banking giants like Wells Fargo begin charging for new accounts and Bank of America announces plans to introduce fees over the next two years. Banks say that overdraft charges and other penalties, which are restricted under the new regulations, paid for checking account maintenance costs and enabled banks to offer free checking.
Customers who are able to meet certain requirements — such as maintaining a minimum balance, making a certain number of debit card transactions, or making a minimum monthly deposit — can have the fee waived. Those who can’t qualify, most likely poor and moderate-income customers, might pay as much as $30 per month in checking account fees.
Debit card charges, restrictions
Last week, CNN reported that banks are considering a spending limit of $50 or $100 on debit cards because of a regulation to restrict interchange fees.
Interchange fees are charged to merchants by banks and shared by the bank’s partners. Reform rules, which would go into effect this July, would lower the fee from 44 cents per transaction to a proposed 12 cents, costing JPMorgan Chase, for example, more than $1 billion annually. Banks say the fees are used to offset losses from fraud, so restricting the amount per transaction would lower risk for the bank.
In addition, banks like Chase have started to experiment with monthly fees on debit cards in some states and have closed enrollment for debit card rewards programs.
Additional fees introduced
Some banks also have introduced a variety of other new fees, such as:
- Monthly charges for paper statements and in-person customer service
- New annual fees, ranging from $29 to $99, for credit cards
- Fees for images of canceled checks
- $10 per transfer to use your savings account for overdraft protection
- New annual fees for new credit lines, plus a daily use fee
Other banks are testing the waters in certain market segments, or charging fees for new customers with plans to expand to existing customers over time.
Community banks feel the pinch
Community banks and credit unions, often loved by their members for low fees, high-interest savings accounts, and free checking, also are concerned about the effects of the new regulations.
This month, community bank representatives testified at a House Financial Services subcommittee hearing that they are struggling to conform with new rules from the Consumer Financial Protection Bureau (CFPB), created by the Dodd-Frank Act. The CFPB, scheduled to start in July, will have authority over institutions that offer credit cards, mortgages, student loans, and payday loans.
“This new bureaucracy…will certainly impose new obligations on community banks…that had nothing to do with the financial crisis and already have a long history of serving consumers fairly in a competitive environment,” SpiritBank Chief Executive Albert Kelly, Jr. wrote in his testimony.
The representatives testified that the volume of regulations (5,000 pages regulations and reporting requirements, plus 50 rules added or modified over the last two years) places a unfair burden on smaller financial institutions. The CFPB also can audit at its discretion on a “sampling basis,” adding to resources required of community banks.
The cap on interchange income also affects the small banks, as their debit cards won’t be able to compete with the big banks if the big banks are required to lower their fees.
Consumers skeptical of reform benefits, says report
While financial reform was billed as beneficial to the consumer, a new report by Javelin Strategy & Research finds that the public is skeptical.
Of those surveyed, 60% said they will switch to an alternative payment method if their bank starts to charge for debit card use. Two-thirds of consumers don’t believe that a reduction in interchange fees for merchants will translate into lower retail prices for consumers, says Javelin.
Some argue that the benefits of reform still outweigh the costs. It introduced regulations that penalize lenders for making irresponsible loans, eliminated mortgage prepayment penalties, and required lenders to give borrowers their credit score when they’re rejected for a loan. Some consumer groups argue that the new, upfront monthly fees and charges are still preferable to overdraft charges and penalties that usually hit poor and moderate-income customers hardest.
What do you think? Are you concerned that the financial reform will change how you bank? Would you switch from debit to another payment method if you’re charged a fee or capped at $50 per transaction?
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I would revert back to good old cash or check if banks started changing fees for debit card usage. I feel the government is over stepping it’s bounds with reform on overdraft fees and interchange fees. Stores will not lower their prices because right now debit card fees are on average lower than credit purchases. Businesses that take cards for small purchases should go back to requiring a minimum purchase it you are not using cash or pass on the debit fee like ARCO Gas stations do. It is a convenience to not have to go to the ATM or Bank to get cash so that is what you have to pay for. It’s not the fault of a merchant that you are lazy or strapped for time. Does anyone remember the good old days when you went to the bank teller for cash prior to shopping? It may also make people think harder about their purchases if they don’t have access to their entire account balance while shopping. Lastly, let the folks who can’t balance their checkbooks pay for checking for the rest of us. We are trying to protect lazy or dumb people from them selves and are not giving them a chance to learn from money mistakes.
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Well, the public is going to be skeptical about things they don’t understand. 5000 pages of banking regulations is something most of us don’t understand. So we’ll react depending on what we are fed by the mainstream media, K street, the bloggers, the Koch brothers, interest groups, etc.
My local community bank was recently sold to USBank, so I took my money out and put it in a credit union. So far, I’m pleased, and they give me money back for using Visa instead of debit at the point of sale (it’s a tiny amount, but I like it anyway).
If the new regulations hurt community banks and credit unions, but continue to give free rein to “too big to fail” financial behemoths to do as they please with our money and our lives (except when caught red-handed), then we’re doing it wrong.
http://online.wsj.com/public/resources/documents/Rowleslawsuit01182010.pdf
http://foreclosureblues.wordpress.com/2011/03/15/a-glimpse-of-the-wikileaks%E2%80%99-smoking-gun-emails-show-bank-of-america-falsifying-loan-information/
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If they put a $50 limit on debit card transactions I’ll just run the thing as “credit”. This has always been a stupid arbitrary distinction anyway when paying with a visa or mastercard debit card.
“Would you like debit or credit?”
Who cares. No one cares. I would like to make my purchase. No one cares by what electronic method that happens. I might as well get a prompt before visiting a web page “would you like your bits delivered by TCP or UDP?”
Nobody cares.
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I’m Canadian, and we’ve had many of these rules as long as I can remember (although the prices quoted in this article are higher than what I’m used to). Canadian banks have always been more strictly regulated, so we didn’t have the same crazy mortgages available here, or the same stories about hundreds of dollars in bounced cheque fees.
Canadians use debit cards a lot, they’ve been popular here a long time. Most accounts have a monthly fee. My chequing account is $12.95/month for unlimited transactions. The only time I pay an extra fee is if I go into overdraft ($5.00), or use another bank’s atm. My bank is one of the big 5 Canadian banks, so it’s never hard to find a bank machine. Special transactions like buying a money order are extra, too.
My limit on debit card transactions is $400.00
I pay for just about everything with my debit card, and rarely carry cash. Most people I know do the same. It’s not hard to shop around and find a flat-fee or low charge chequing account. I do know of people who pay a fortune in bank fees, but they are the sort who never really look at their bank statement or make any effort to find the right plan for their needs.
A small monthly fee seems like a small price to pay to avoid the craziness of the American banking system. Canada’s banking system seems to be in pretty good shape by comparison.
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I predict less loyalty coming as people switch whenever the fees are applied or get too high. I also predict the market will eventually correct itself when enough customers jump to the banks NOT associated with tons of fees. USAA, PenFed, Ally, and probably several others still offer free checking, ATM fee refunds, deposit at home and other things necessary for banking in the modern world. People that insist on staying with a bank charging them crazy fees might have to pay more, but the rest of us know there are alternatives.
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This is incredibly frustrating and worries me. We use our debit cards for everything. Groceries alone would exceed the cap. It seems like the middle class is merely a pawn in a chess game. Companies have leveraged their collective voice with lobbyists who constantly engage and pressure Congress. The banks’ appetite for profit seems insatiable. Retailers have leveraged their collective voice by pressuring Congress to limit interchange fees. However, the middle class is busying themselves with building a life, funding college educations, building a retirement nest egg, grappling with unemployment, etc. -we cannot be on Capitol Hill advocating on our own behalf. I don’t like the idea of putting everything on a credit card. I also find it repulsive that large banks think their beyond regulation, at the height of the recession they came “hat in hand” and now they are blatant about their utter disregard for their customers. Interchange are merely one source of revenue, insane.
Anytime there is a scapegoat -it’s the consumer that gets the short end of the stick.
@ Tyler (Post #3) – Per the CNN article, the cap would apply regardless if you run your debit card as credit. It should have been apparent that the banks would not allow consumers to so easily circumvent the proposed cap.
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While tacking on new and semi-arbitrary fees isn’t new, two of my previous banks started adding such fees (teller fees & cheque-image fees). I dropped each account so fast the ink on the cashier’s cheque barely had time to dry before it was deposited in a new account at a bank with a much customer-friendly worldview. So go ahead, $CURRENT_BANK, I dare you to call my bluff.
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Maybe I am crazy, but having a bank account is a service that allows us to conveniently exchange currency. As a consumer, I have to pay for every other service that I use, why is it such an issue to pay for this service? Granted, we have become used to free checking and/or earning interest on our money in banks because banks have been able to make money without charging us fees on checking accounts. I see this legislation as bad for consumers. Capping interchange fees will do nothing for the consumers as the business will keep the contribution margin that was going to the banks. It will not be passed on to us consumers. Banks were taking a small percentage of the transaction to cover costs associated with maintaining and operating the system that allows the transaction to occur, plus some profit. With a smaller percentage or nothing at all (which some businesses lobbied for) the banks will not have any reason to operate that system. Once a debit/credit card is accepted at the merchant, it is guaranteed payment to the merchant whether or not the funds are in the account when the transaction is actually processed. That is great for the merchant. If banks have no incentive to operate this service and take it away, then we are back to checks which are not guaranteed to be paid and most merchants refuse to accept these days. I guess this is one way to go back to a cash only society. Having cash to cover a lot of expenses for the month at one time is a huge liability. Banks cover fraud on the cards, but if someone stole your wallet/purse with $200 of cash – unless you track them down and take them to court, you won’t see that money ever again. This is just bad for the consumers.
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Jason is 100% correct. Most of the whiners here don’t realize that when they go to the grocery store that prices usually go up. What is next, government regulation of veggies and meat? You don’t have to have a bank account – just use cash and hope that you don’t get robbed.
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A cap on debit card transactions would be difficult for me to adjust to. I’m fairly young and have always had a debit card. I love electronic banking. It gives me the ability to track my spending down to the penny, without having to keep records other than printing my monthly statements. it is rare for me to carry more than $30 in cash for a week’s purchases.
While I sympathize with businesses having to pay a fee to process debit transactions, surely they benefit from customers having more options to make purchases. Another example of regulation getting in the way of a functioning market.
@Bill from Reno: It isn’t the merchant’s fault I didn’t have time to get cash, but isn’t it the merchant’s job to make it easy for me to give her my money?
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I don’t like the fact that I have a $1,000 limit on my debit card now. I would happily pay a small “fraud insurance” fee as opposed to having all these regulations and restrictions. The limits make it impossible to buy things like multiple plane tickets on a debit card. I don’t want to use credit, and paying cash for a plane ticket these days is a one-way ticket to cavity search land. As to the proposed limits? A $50 transaction limit would be absurd. You can’t even gas up a midsize sedan for $50.
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I’d probably just move to cash, or just dump more money on my Smartypig card. It’s certainly not worth it to me to pay banks for the privilege of having them hold on to my money for the measly 150 I may spend on my card a month.
I mean they’re paying minimal interest and want to charge crazy fees and add restrictions to something that was only making a profit for them because of the ease of use and the fact that the added utility helped them crowd out competitors with better plans. Money in a savings or checking account is money lent to the bank. Where’s the benefit for me?
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I can’t wait for the mass exodus of customers when banks start going to fees for basic checking accounts. Whatever bank(s) (ING?) stick with free checking will have a ton of new customers.
If they starting charging/limiting debit card transactions there could be a negative consequence of people reverting back to checks – which (I assume) cost much more to process than debit.
Has anyone actually seen this happen yet or is it all just media speculation?
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@DreamChaser57:
I don’t see where the article says that. It seems almost deliberately evasive by not specifically saying what would happen if you run a debit card as credit.
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@DCh57-Repulsive indeed! But I don’t really think those limits are going to fly, in the end, as they would hamper commerce.
@ Kevin M– and yes, could be media speculation. Hysteria sells news.
We’ll see what happens to ING though. The ING group is selling off ING Direct USA so that it can receive bailout money from the Dutch government. I found this out last week while shopping for an online business savings account.
This is the latest news bit I’ve found on the subject (posted 18 hours ago)
http://www.reuters.com/article/2011/03/18/us-ing-ge-idUSTRE72H8E220110318
Just the other day they were in talks with Citigroup.
I’ve no idea who will end up owning the bank or what they will do with it.
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Some fees can be easily worked around. For instance, Comerica recently started charging me an account maintenance fee unless I had direct deposit to the account. However, it turns out that scheduling monthly transfers of $1 from ING to my Comerica account qualifies and eliminates the fee. If you wanted, you could schedule a $1 transfer in both directions (from Comerica to ING and from ING to Comerica) and forget about it. Or at least forget about it until they change the fee structure again…
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I think that cash is still king, particularly in this climate. From my understanding, the charges levied by debit and credit cards are designed to profit the card issuing companies and the banks. The charges are seldom absorbed by the merchants, and are instead passed on to the consumers. To maintain their earnings, banks will use all sorts of marketing techniques and “points” to entice people to spend on buying products or services from businesses. Unfortunately, the entire ecosystem will result in higher cost to the consumers like us ultimately. So switch to cash and I guess with sufficient numbers, that ought to put pressure on the profiteering parties.
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The whole logic of having a bank account is that you deposit your money, which the bank can then lend out and charge interest on, therefore making their money (and if you’re lucky paying you interest on it as well).
This “more more more” business model needs to stop.
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I too think that more people will switch from banks to credit unions/smaller banks if these large banks impose hefty fees. I recently signed up for a Chase checking account for some frequent flyer miles. I will definitely be closing that account ASAP.
I would have kept it open for convenience, but it’s just not worth it if I’m going to be charged each month for keeping money with them.
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Heck yes, I’d change. I’d pull all of my money from the banks that practice these policies, and find a credit union or bank that still treats customers fairly and refuses to charge for services that should remain free. It should not cost exorbitant amounts of money to have a place to store your money nor to have a way to access and use your money.
Failing that, I’ll live 100% cash only (I use debit cards, I have no credit card nor do I have credit debt, just a small student loan and a mortgage I’m trying to get rid of). And if the bank charges me to cash the check, I’ll tell my employer I insist on being paid in cash, and I’ll tell them why.
Banks have no business dictating to a consumer how and when the consumer can use the money that the consumer has earned! It is up to the consumer to choose what the cap is on his/her own spending, when and how much to transfer into other accounts, and so on.
If you overdraft, yes, by all means, that is an acceptable charge. But these proposed charges are punishment before the “crime” has occurred, to people who may never commit the crime, and they are punishing everyone equally (including the innocent) for what a scant few might do!
Why does this move sound communist to me? It’s over-regulation of consumers that had no part in the economic fiasco. You want to enforce charges? Do it to the banks and the mortgage companies! We consumers are the innocent bystanders on the verge of becoming victims of someone else’s corporate atrocities.
Besides, it is common knowledge (if you’ve taken Economics) that when you place your money in the bank, you are giving the bank permission to add your contribution to their reserves, which they then use to provide others with loans. (That’s right—your money isn’t actually “in” the bank. It’s just abstract numbers on a computer screen or bank statement, until you go and get the cash.) This, IMHO, is a pretty fair exchange. We let you use our money that we earned so you can give it to other people. We should be charging the banks interest for allowing them unrestricted access to OUR money, not the other way around!
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Did a lobbying group sponsor this post? Honestly, it’s a pure rehash of industry talking points. I have some sympathy for community banks, but most of the 5000 pages of regulation are to regulate activities that they don’t engage in anyway. For larger banks, it’s not the end of ridiculous fees on overdraft accounts that is hurting profits, it’s the billions of dollars of bad mortgages.
These are scare tactics by a major industry to get out of basic consumer protections. And by running a piece that rehashes these claims as though they are the truth, without the barest attempt to explain the logic behind the regulation, GRS is participating in this effort. No wonder consumers are suspicious, if this is what passes for financial journalism.
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The problem with moving a checking account to someplace like ING is that they don’t actually let you write paper checks with their checking account. Most of my bills are paid electronically, but I still write plenty of paper checks per month (school field trips, township sewer bill, some doctor co-pays). Some places don’t take cash and won’t take a card (or will with an additional fee). I’d love to dump my bank but I need the ability to write paper checks.
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What Sarabeth said and I’ll believe the sky is falling when I see it actually fall. I have faith in market competition across banks and credit unions.
Also, Wells Fargo is still giving me free checking, with a minimum balance, same as before these regulations. So is my credit union.
As to poor folks who can’t keep minimum balances, they were paying through the nose for fees before… that’s one major reason so many low income folks are unbanked. Yes, banks will figure out new ways to squeeze these folks, but I seriously doubt this regulation is making them worse off. Again, I’ll believe that when I see it.
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I usually carry around $60-80 cash to pay for small purchases. Anything over $20 I pay for with a credit card. I only use my debit card to withdraw money from an ATM. So it really won’t affect me. My question is what does this have to do with banking reform? How will these changes keep banks from making absurd mortgages? It’s sounds as if it’s just a political move to look like we are protecting consumers when in reality not much is being done to avoid a crisis like we experienced a few years ago.
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I’ve had a free checking account since I opened one when I was seventeen. This year my bank, Chase, started charging for checking. I closed out my account and moved to a credit union.
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Timely post. We just today and yesterday got mailings from Chase – all of our debit rewards cards (that earn points we can use for mileage rewards on an airline) will no longer earn points as of July 12th or so.
Chase is refunding the portion of the annual fees we paid that apply to post-July 12th period.
No, I haven’t read the whole Dodd-Frank bill – anyone know if we will even have the choice of “debit or credit” anymore, or will debit cards only be able to be used as debit? Or is it bank by bank?
We are moving soon and this will make us more likely to switch from big national bank to local bank or credit union – the rewards debit was about the only thing they didn’t offer that the big national bank did offer.
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The banks are passing on all that yummy regulation onto the public, thanks D.C.
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I am old enough to have started banking before debit cards existed. Gee, I managed to buy groceries anyway, and in fact I’ve never acquired a debit card (maybe I have one and don’t know it — I do have an ATM card, but that’s all I use it for, to extract cash from the ATM).
I know that small retailers felt that they were being really beat up by debit card fees from the banks, and the new regulations are to help them, not to hurt consumers. I often use cash (not a credit card and certainly not a debit card) so that my small local businesses can stay in business more easily; when I use cash they don’t pay anyone any fees and it makes little difference to me to use cash rather than some other method of payment.
I saw in the paper today that the big banks are planning to issue dividends to their shareholders again, so they aren’t really losing money and I think I’d agree with those who say, if your bank starts trying to make more money from you, look around for options, get mad at them, not at the government ,or at businesses who are also at the mercy of the banks!
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Hi Tyler (Post #14) –
Did you click on the CNN article link? Check the second paragraph, last sentence.
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Regulation is very necessary and beneficial for consumers. Any talk to the contrary is just believing bank propaganda. The major banks are all pretty profitable so this won’t really hurt them. Banks are just whining and trying to scare people cause they know their profits might drop a little. If your bank threatens to raise your fees then threaten to find another bank.
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I’m with Bill from Elsewhere, I dislike the limit of $1000 I have now, the agent that upped the limit on that urged me to stick with $500 or lower ‘in case I get robbed’ highly unlikely with the crime rate in my area. Either way, I’m Canadian and most of these fees don’t seem outrageous for me with the exception for the proposed spending cap on debit (doubt it will happen) most of those items are already common here. That said, if things become more restricted I will move to cash & credit card only. Pretty simple. We won’t see a dime of these regulations either, the cut in interchange fees will be made up elsewhere and won’t affect the consumer. Cash is king baby, here to stay.
Also, I’d prefer a FREE market with no regulations… we wouldn’t have this kind of crap to deal with because the market would decide what is and is not acceptable.
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I’ve never used a debit card. I prefer to use a credit card and pay the balance in full each month. I like having the credit card issuer as a intermediary between me and the merchant if I have to dispute a transaction. With the credit card, I retain the advantage because I can hold on to the money until the dispute is resolved.
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If you are trying to get rich slowly, why aren’t you already using a credit union? For that matter, why aren’t you paying with cash? Having to go to the credit union to take out cash has saved me from many impulse purchases. I recommend the method.
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@DreamChaser57:
Ah, somehow I missed that sentence, even reading through the article twice.
@Brent:
If using a credit union instead of a bank makes such a huge difference, why aren’t you rich yet? You’re entitled to your own preferences, but don’t pretend like everyone who doesn’t share them is de facto failing.
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Timely post indeed. I just got off of the UW Credit Union Site where I saw a $5 overdraft fee in my account and came here for some dinner readings. Interestingly enough, this article is right that even credit unions are trying to adjust to the new legislation. What bothers me is that I never received any notification in the mail (postal) or email. From experience working abroad, I am aware that in France it is normal to pay 13 euro a month (credit mutuel) for a bank account with a debit card. There is no free anything there with a bank and maybe our golden days in the US are over. I could see most Americans being okay with absorbing the fees for change to paid checking and credit purchase limits just because the change happens slowly and quietly (e.g. my bank not notifying me). Carrying cash isn’t practical or safe anymore and most consumers act out of convenience and impulse, not reason or logic. People here are talking about standing up to the big banks and I’m stuck having to stand up to my credit union . . . looks like nobody can win on this one.
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Big banks only care about growing their balance sheet. I found a better solution years ago and have been happy with it.
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I will start using cash a lot more once these fees occur. However, the internet makes it a lot more possible to switch to banks that are not charging these fees (PNC out of Pittsburgh for example). And if you get your paycheck direct deposited, then you can always use “get cashback” at stores to get your cash if no ATMs are convenient to you.
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Before this legislation the fees were easier to avoid. Now it looks like they are just migrating to other products and services that most people depend on. Just another example of the collateral damage that takes place when congress tries to “fix” things. On the upshot, I think banks can’t risk too much more negative publicity and will likely not follow through with many of these proposals in the long-term. Thanks, as always, for another informative post.
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If my bank (US Bank) would cease to offer free checking, I would close it up in a heartbeat even though I’ve had it for years. My bank is convienent for me since I also have my mortgage through them (Makes online banking much easier), but the potential cost of a checking account fee outweighs any convienence that offers. Never paid for a checking account in my life, and don’t plan on starting to anytime soon. I primarily use my credit card to get the rewards points (Yes, I pay it off in full every month), so limiting my use of a debit card isn’t really relevant and holds no concern to me.
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Here in Germany, you have no problem finding a bank account without fees for normal thinks. Debit card is often free or free if you have regulary income (if not, the price is 5 or 10€ a year).
Credit cards normally cost something (There are free ones, though) around 20€, but you don’t need them. I have none. The only case where I could really need them is my shopping in Japan – I pay with Paypal in these cases.
A transfer to another bank account costs nothing (up to 50 or 100 transfers, which a normal person never has). And checks… well, I don’t know about them since nobody here uses them since many years. I’m 28 and never have used one. Why bother with them, if you can transfer money for no fees?
Now ask yourself which fees are really “necessary” for your bank to survive.
I have paid no fees in my entire life. (Except a few times where I forgot to get my monthly account statement (thats the word?), then it gets send to me for the normal cost of a letter.)
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This is poorly-researched/worded post. The Consumer Financial Protection Bureau has not issued ANY regulations whatsoever. In fact it cannot prior to July and perhaps more importantly, prior to the appointment of a director. Any new obligations at this point are directly mandated by Congress (and in the case of the interchange fee, the specific proposal floated was from the Federal Reserve Board). From what I can see there is a concerted effort to cripple the CFPB before it even takes off the ground. Sad to see a personal finance blog parroting the hype.
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In the UK most current accounts are free to use. I find the idea of paying really weird. We’re giving the bank our money to look after and they loan it out to other people, they should be paying us for providing them with capital (i.e. interest) – never the other way around.
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@39 – US Bank charges for checks, we ended up closing our account with them. They also threatened to start charging for a checking account if you didn’t keep a large minimum amount. Make sure you check carefully any paperwork from them. We also have our mortgage there, but switched to USAA for my husband’s checking account.
Also, for those of you with a $1,000 limit, usually you can call if you need more and they will give a temp. raise. USAA’s limit is $5,000 normally, but they raised it to $16kish when I had to buy a new car. Just ask if you really need more. Also, keep in mind that ATM machines don’t have unlimited amounts in them – if everyone took out huge cash amounts, they would run out of money quickly, the limit isn’t there to hurt you necessarily for cash and the limit for large purchases helps make you think before you buy – and really, spending $1,000+ you should think carefully if you need the item.
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I’ve got two checking accounts and the one I’ve had longest has started increasing all the fees mentioned in this article, as well as canceling the rewards program for its use. As it is, I’ve been using my credit card more often anyway since it has a better reward program and I can pay it off monthly.
I’ll probably just cancel my account at this point. It’s evident they really don’t want free checking clients that much any more, and I don’t blame them either.
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One thing the banks will not tell you is that they are not *required* to increase fees. Just change to a bank/CU that doesn’t.
I left Chase last year because they “had” to charge me $12 for exceeding the max number of withdrawals. Know how much my CU charges? One dollar.
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Banks have gotten greedy with all those years of deregulation and obscene profits. The new regulations, as imperfect as they no doubt are, aren’t costing them money so much as they are potentially lowering revenues.
And, guess what, all the revenues that don’t end up with banks will stay with another actor in the transaction: a retailer or other vendor of some sort or you, the customer.
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People deserve what they get. Chase, Bank of America, Wells Fargo and all the other big guys have actively been trying to rip people off for years. In what other industry could a party just change it’s interest rate at will for no reason other then it felt like it? In what other industry could a party change the payment due date to try and trick people paying via automatic payment to pay late?
Further those same banks have undermined the whole real estate market and economy in general. Yet they are still in business due to government bail outs. The Banks do not even pay federal taxes. There is patriotism for you.
Again, people deserve what they get. There is a million Chase banks around me. I will drive an extra half mile to bank local. None of my money is going to pay CEO’s of those big banks a huge bonus when the same banks are actively working against Americans.
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I think the consumer is going to get hit hard by this. Instead of punishing only those who write bad checks with overdraft fees, we’re all paying the price in the form of higher monthly fees and restrictions. If my bank does this I’ll have to start using credit cards which I really hate doing. I prefer to pay for everything with my debit card, reserving credit cards for emergency purchases that would wipe out my emergency fund.
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On the debit card thing, look, if one has the money in the bank, use a credit card with a rewards program and then immediately pay off the credit card in the next few days. That way, not only do you avoid this idiotic ploy by your bank, you accumulate rewards along the way. So far this little trick has put me $65.00 ahead of the game and I just started doing this a couple months ago.
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Everyone one keeps talking about going back to checks but many place process checks as debit transactions (receiving your check back immediately after the transaction at the register) so my question is does this cap apply there too.
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