Creditnet News Story
Financial institutions seek to profit from checking accounts
Tuesday, June 22, 2010
By Sam Lee
Free checking may become a thing of the past as banks become creative in finding ways to bring in profits after reform.
Consumers have become accustomed to obtaining a variety of services from banks with little to no charge. Now that banks' "abusive" practices are under siege, profits from overdraft fees and the like are expected to drop, forcing banks to install new charges to bring in a profit.
Historically, banks have offered checking accounts to consumers as a way of gaining their business and forging an ongoing relationship. Now those accounts may be part of financial institutions' plans to make money.
"Some banks that once waived monthly maintenance fees on checking accounts for people who carried big balances no longer do so or are raising the balance limits, says the Wall Street Journal. "The fees, which run as high as $15, are likely to rise, too."
One place where banks are going to lose considerable profits is from overdraft fees. Financial institutions charged nearly $24 billion for such transactions in 2008, according to the Center for Responsible Lending.
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