It's the end of an era - the era of free checking.
Since the 1990s it has become expected of the big banks to offer free checking accounts. But all good things must come to an end, and we have Dodd-Frank and the Federal Reserve to thank for it.
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At the end of 2010, according to The Wall Street Journal , the Fed considered capping what banks can charge merchants for debit card transactions at 12 cents. Up until now it's been 44 cents, and that's a huge difference.
Bank profits from these transactions would be cut in half - a loss of nearly $10 billion.I know - we're not going to shed too many tears if the big banks lose a couple of bucks, but the big banks are going to just settle for a loss. They're going to find ways to make up for it - meaning making us, the consumer - pay more.
JP Morgan Chase is testing a plan to force customers in Georgia pay $15 a month for their once-free checking accounts. They will charge debit-card users in Green Bay, Wi, a $3 monthly fee.Free checking will be a thing of the past in some parts of the country for Bank of America customers-- they'll charge a $6 monthly fee in Massachusetts, and a $9 monthly checking account fee to Arizona customers.Current Wells Fargo customers in Delaware have already seen their free checking turn into $5 checking accounts. Fifth Third has already scrapped the concept at all of its branches, and U.S. Bancorp has stopped offering rewards programs with their new debit card customers.
Rewards programs, many say, will be the next to go after free checking, and it's not just big banks. A survey by the Independent Community Bankers of America says nearly all of the small banks will soon make similar changes to services that are now free.
This should not come as a surprise to many people - especially the folks in Washington. Bankers warned Congress when they were debating the financial regulation bill that all the costs and fees being imposed on them would be transferred down to us.
So once again more government involvement is going to cost us more.And I for one, am sick of it.