3 Mega-Banks Screwing You With Sneaky Fees -- Again
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In recent years, the U.S. government has imposed important new regulations on big Wall Street banks -- rules designed to keep banks from preying on consumers. But ironically, the mega-banks have responded to those regulations in a decidedly anti-consumer manner, with a relentless campaign to impose unfair new fees on the very consumers the regulations were designed to protect.
For years, big shiny banks like Chase and Bank of America were where you went to get "no fee," "no hassle" checking accounts. We all got so used to seeing ads touting free checking accounts that many of us just came to accept free checking as the norm. At the same time, many of us have had our checking accounts with the same big bank (and/or the big bank that bought out our original bank) for years, giving some of us the impression that we're still getting the same great deal as when we signed up.
But think about it for a second: How many advertisements for "free checking" have you heard in recent months? Probably not very many, because free checking is no longer standard at big banks. Quietly, banks have ratcheted up the fees associated with their accounts, and now, according to research firm Moebs Services, virtually all of the big banks have stopped offering free checking accounts. At the same time, the banks have increased fees for everything from lost debit card replacements to account minimums and even the "privilege" of speaking to a bank teller -- fees that often disproportionately affect poor consumers who may have less flexible schedules and a harder time maintaining account minimums.
Banks have long been fans of charging egregious, often hidden fees, but new regulations have made some of their old favorites illegal. For instance, banks can no longer charge those outrageous $35-per-transaction overdraft fees without giving customers the option to opt-out of overdraft protection, and they can no longer change interest rates and fees without informing customers. But as under-regulated industries in a capitalistic system are wont to do, the banking industry has focused on increasing profits, lousy economy and new regulations be damned. And if the banks can't make money the old-fashioned way, they've decided they'll just have to get creative with how they roll out their new fees. For the banks, getting creative means adding fees that specifically target lower-income customers -- the customers who are struggling the most in this economic downturn.
The banks' efforts to impose new fees have not been uniformly successful. Last fall when Bank of America tried to pave the way for other banks to charge monthly fees for debit card use, the consumer backlash was so huge that not only did Bank of America back off, Chase, Citigroup, and other big banks pre-emptively shied away from the idea too.
But apparently that backlash wasn't enough for the big banks to give up on new fees altogether. Below are several banks that have announced sneaky new fees recently.
1. Bank of America may charge up to $25 per month for checking accounts.
Bank of America, which was the target of so much consumer outrage over its proposed $5 debit card fee back in the fall, is now considering a fee "overhaul" that could significantly increase the cost of a checking account for millions of customers. The Wall Street Journal reports:
Bank of America pilot programs in Arizona, Georgia and Massachusetts now are experimenting with charging $6 to $9 a month for an "Essentials" account. Other account options being tested in those states carry monthly charges of $9, $12, $15 and $25 but give customers opportunities to avoid the payments by maintaining minimum balances, using a credit card or taking a mortgage with Bank of America, according to a memo distributed to employees.