Radical changes brought about for checking accounts
When the Dodd-Frank Wall Street Reform and Consumer Protection Act was implemented in 2010, there were a plethora of restrictions that were levied on the banks and other financial institutions. This posed a big concern to the banks since revenue that ran into billions of dollars stopped flowing into the coffers. This left banks with no options but to restrict the “free” services they offered their clients. In addition to the 2010 reform, further federal legislations were brought into play in October 2012 which placed a restriction on the credit and debit card charges being levied by the banks. This further increased their losses. This move caused Bank of America alone to lose revenue of close to $2 billion dollars each year.
Recent surveys that have been conducted by leading agencies in this field have revealed that the free structures in banks have witnessed a radical change over the last three years. One of the most noticeable of all these changes is the disappearance of “free” checking accounts. Most of the banks in the past offered free checking account services to clients who maintained a particular amount of minimum balance. However, today, such services are being shown the door. A recently conducted survey has revealed that there only about 39 percent of the banks currently offer free checking accounts as compared to 76 percent in the year 2009. The survey has also revealed that 72 percent of the credit unions still offer free checking accounts.
Though most banks have taken off free checking accounts, there are a few that continue to offer this in another form. In certain banks, customers have to maintain a certain amount as minimum balance in order to prevent paying the monthly fees. The current average stands at $723.02 which is a clear increase of 23 percent as compared to last year. For instance, the Wells Fargo bank charges a fee of $7 for monthly statements. To avoid this fee, customers have to either have over $500 coming through direct deposits every month or they have to maintain a daily minimum balance of $1500. In addition to these charges, the overdraft charges and other monthly maintenance charges have also seen an upward trend in recent times.
