Regulation of bank fees

Introduction

Recent regulations have clamped down on the less obvious fees [to consumers]. It's made it much harder for the bank to make money, so as a result these new or higher fees are coming out into the open. Some are non-negotiable—banks have set up rigid rules about the cost of checking, money market and savings accounts—meaning your best bet is to compare banks with the best rates. Other nagging fees can be avoided with a little bit of leg-work.

Regulation of Bank Fees

Many banks have been introducing new fees over the last year in response to a wave of new financial regulations. If you haven't been paying close attention to your accounts, you may be surprised to find new charges on your banking statements (Barro, Pp. 32).

1. Monthly Service Fees

Many people are accustomed to getting free checking accounts through the major financial institutions. However, many banks are now putting an end to free checking accounts, since they can turn unprofitable when customers use too many bank services, but do not hold a sufficient amount of money in the account. Although the days of free checking are not yet over, these accounts are becoming harder to find. Virtually all of the major U.S. banks have ended their free checking accounts for new customers within the past year. The fees being charged vary by bank, depending on the level of services offered.

The monthly fees can typically be avoided, but only if you are willing to adhere to an increasingly complex series of requirements. Generally, customers must have money directly deposited to their accounts, maintain a sufficient monthly balance or buy other bank products (Chelleg, Pp. 47).

For those that do not need access to a large network of physical branches, there are many options for free checking, with online ...