Thursday, September 24, 2009

Banks: You're not off the hook for fees

Posted By on Thu, Sep 24, 2009 at 2:04 PM

You didn't think our banking giants were just being sweet, did you? They're not. They are, as always, looking out for their bottom line, for their shareholders, while finding "creative" ways to pull money out of their customer's pockets.

My best advice to you: CYA.

Banks are backing off harsh overdraft fees and policies. That's the good news. The bad news is, they'll probably look to make up that lost profit elsewhere.

It's a worrisome prospect for the vast majority of customers who never overdraw their funds and have grown accustomed to perks such as free checking accounts.

"Banks are going to have to get creative," said Bob Meara, a senior analyst with Celent, a Boston-based consulting firm for the banking industry.

That might mean the return of monthly fees or minimum balances for checking accounts, or the bundling of accounts with other services for a fee. Customers could also be steered toward lower-cost services such as online banking, Meara said. Use of debit cards, which bring banks revenue from fees paid by merchants, may be encouraged. And networks of bank branches across the country could shrink, too.

Such changes could help offset the steep losses banks face as they overhaul their overdraft programs, which have come under intensifying scrutiny in the past year. Lawmakers are expected to soon start imposing new restrictions on overdraft fees, and the industry response has been swift. Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co. all announced this week that they are easing up on the fees.

Read the rest of the article at Charlotte.com.

Overdrawn!

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