Bank fees not constrained by banking regulation are on the rise according to reports across the U.S. Observers claim the new bank fees and fee increases are due to interest and fee restrictions imposed by the Credit Card Act of 2009. However, larger banks may also be trying to offset smaller profit margins and $50 billion in higher aggregate Federal Deposit Insurance Corporation (FDIC) fees arising out of the Financial Regulatory Reform law enacted in July, 2010.
Some of the new bank fees that are beginning to emerge are account transfer fees, inactivity charges and maintenance fees. These are bank fees that are new for some banks seeking to supplement revenue, but are not necessarily new types of fees. Additional fees pointed to by the NASDAQ stock exchange and Investopedia are minimum balance fees, overdraft protection fees, ATM charges, check fees and even miscellaneous fees.
Essentially, if it comprises a financial service and it’s legal, there’s little reason to think some financial institutions won’t consider implementing new account cost structures. So which financial institutions are less likely to charge new bank fees and why? According to the Financial Reform law and the Baltimore Biz Journal, smaller community banks are less targeted by the new financial reform law not to mention member owned credit unions. However, with these smaller financial institutions come potentially smaller loans and more limited financial service options.
Ways to determine which banks are charging what fees, and if a financial institution is worth banking at include reading customer bank reviews such as the full reports at consumersearch, consulting the Federal Reserve Bank’s website about Bank Accounts and Services, and mortgage loan shopping, and by contacting financial institutions directly with questions. The Federal Deposit Insurance Corporation (FDIC) recommends keeping a close eye on banking correspondence and seeking alternative ways to receive the same services at lower cost such as withdrawing money with purchases rather than through an ATM.
According to Qcitymetro, new and higher bank fees charged by Wachovia and Bank of America include paper statement fees with copies of canceled checks, printed account summaries, flat rate fees for some types of checking accounts, higher monthly account charges and fees for using ATMs from other banks. Still more fees to watch out for are paying credit cards off in full and line of credit fees. For example, HSBC bank charges its clients $10 for each day of overdraft protection used according to a September 25th report by Blake Ellis of CNN Money.
Sources: (Date of record, September 28, 2010)
1. http://bit.ly/b3tOtN (FDIC)
2. http://bit.ly/aTYdIQ (U.S. Senate)
3. http://bit.ly/aV2TKG (NASDAQ)
4. http://bit.ly/bsmF7G (Baltimore Biz Journal)
5. http://bit.ly/cI6Uv2 (Qcitymetro)