Nessa Feddis, senior counsel at the American Bankers Association, says that provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act have cut into bank income that pays the costs of providing checking and debit services.
“If government intervenes in markets and eliminates a source of income, a bank, like any other business, has to find some way to make up that lost income,” she says.
But Edmund Mierzwinski, consumer program director at the nonprofit U.S. Public Interest Research Group, says banks are using the new regulations as an excuse to raise consumer fees. "Bank of America and others are rolling out debit card fees because they can, not because they need to," he says. His group has studied bank charges since the mid-1980s.
Customers such as Marc Kruskol, 54, of Palmdale, Calif., are using their feet to say no to fees. He recently closed his checking account at J.P. Morgan Chase because he didn't want to keep the required minimum balance in order to avoid fees. He moved his money to a credit union offering better terms.
"I don't like giving money away," he says. "When [banks] start charging, this is the end."
Debi Goldben says she was fed up with new fees imposed on her checking account at a Florida bank. The 53-year-old marketing coordinator closed that account and opened a new one at a credit union.
Also of interest: Why try a credit union? >>
Bob Calandra is a freelance writer living near Philadelphia.