Bank on it: Higher fees, and more of them, are coming soon to a financial institution near you, according to Robin Sidel of the Wall Street Journal. Regulators in the past year have pushed through a raft of changes designed to rein in banks’ most abusive practices, from excessive overdraft fees to the way lenders raise interest rates when a credit-card payment is late.
Wall Street Journal reports:
“You’ve got to read those annoying messages that you get because they will be the ones that will tell you what is happening, so you can be prepared to vote with your checkbook and take it somewhere else,” says Gail Hillebrand, a senior attorney at Consumers Union in San Francisco.
Consumer advocates worry that the new fees will unfairly whack consumers who keep low balances and manage their accounts responsibly to avoid any penalty fees.
“That’s the group that will be most penalized in this environment,” says Bill Handel, vice president of research and product development at Raddon Financial Group, which advises banks and is a unit of Open Solutions Inc.
The first and biggest casualty in the new fee assault: free checking. Most consumers haven’t paid for a checking account in years; banks have long given away their checking services to establish relationships with customers who might later take out a mortgage, invest in one of their mutual funds or otherwise give them more business. Such free accounts have often included other popular—and valuable—perks, such as free online bill payment, debit-card rewards and free check printing.
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