So-called free checking accounts are more expensive than ever, as the lumbering economy and new regulations squeeze bank revenues.
To avoid a monthly fee, bank customers in the U.S. must keep an average minimum balance of $723 in checking accounts that pay no interest–up 23% over last year.
The average monthly fee on non-interest checking accounts rose 25% to $5.48, also a record.
Banks have raised fees on automatic teller machines, overdrafts and checking accounts for customers who don’t meet new standards tied to account balances or regular deposits.
A public outcry last year over the prospect of new monthly fees for using bank debit cards forced big banks to retreat from the idea.
But a soft economy, low interest rates and new government rules that followed the financial crisis are prompting banks to flex their muscles on existing fees. Revenue at federally insured banks and thrifts dropped 1.9% in 2011 to $652.71 billion, according to FDIC data. Maintaining checking accounts cost most banks $250 to $300 a year, according to industry estimates.
Banks say new regulations have turned many of the accounts unprofitable.
Story by Robin Sidel at the Wall Street Journal.
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