Senior bank officials have had to dream up new fees to replace those trimmed by law
The title says it all: new year, new laws, new fees. Wednesday’s Wall Street Journal reports that big banks, fearing a loss in revenue following the enactment of key provisions of the Dodd-Frank financial reform bill, are brainstorming new schemes to extract fees from average consumers.
Dodd-Frank gave new powers to the Fed to regulate bank activity. Fortunately, the Fed has not failed to act. The latest proposals call for limits on charges to merchants for accepting credit cards – a move from a purely percentage based scheme to a fixed monetary range. In addition, banks expect to lose millions in revenue from curtailment in overdraft fee charges now that consumers have an easy opt-out option.
The banks aren’t taking the changes lying down. The Journal article claims that senior bank officials “have had to dream up new fees to replace those now trimmed by law.” The fees run the gamut from relatively benign to patently absurd. Here’s a taste of the negative changes we might see in 2011:
- Annual fees of $25 or $30 on debit cards
- Limits on the amount of debit card transactions allowed in a month
- Limits on the size and amount allowable in debit card transactions
- The end of debit card rewards
- Increased ATM fees for non-customers
- The end of free checking
- Inactivity fees
- Minimum deposits
To be sure, this is not an exhaustive list of the creative fees that Wall Street is sure to dole out – the list is merely a sampling from Wednesday’s Wall Street Journal article on the topic. What’s worse; many of these fees or other proposed fees can be avoided with high minimum balances. That’s right, if you’ve got a Wall Street banker’s salary there’s not much to worry about. On Main Street, however, we’d best beware: the fees are coming.
Wall Street Just Doesn’t Get It
Has something changed in the last 1,000 years to render the system of deposits and loans so grossly insufficient that no bank could possibly survive without complicated fee schemes? No. Main Street isn’t looking for some revolutionary service at no cost – all the people want is a bank where they can deposit money, spend that money as they please, and take out loans for reasonable expenses or investments. Fees for simply owning a debit card, maintaining a balance less than that of a New York banker, and inactivity are ludicrous. Unfortunately, Wall Street is unlikely to see the light. For now, hopefully the Fed and big banks can work out a plan that won’t add mountains of fees to the average consumer.
So, as the year progresses and regulations change, keep an eye out for new fees at your bank. Be sure to read any updated terms sent in the mail and monitor your account. If you feel that you’ve been charged any unreasonable fees, particularly fees to which you have not consented please contact Zach Kady or David Martin at info@berklawdc.com or 202-232-7550. Also visit us at www.berklawdc.com.
Assisted by Zachary Kady