Checking fees too high? Customers eye credit unions.
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Though Bank of America backed away from the debit-card charge, the bank said Thursday that it is continuing to test a new menu of checking accounts that includes higher fees. A spokeswoman said it hasn't been determined when the fees would be rolled out.
Criticism of excessive fees slapped on customer checking, savings and credit accounts has escalated during the last year. It has led the government to announce Thursday another way for Americans to register their gripes about service.
The Consumer Financial Protection Bureau, created in the aftermath of the financial crisis and near-meltdown of the banking industry, is now logging consumer complaints about their accounts. The agency said it expects to field calls on problems related to opening and closing accounts, dealing with low account balances and using debit or ATM cards.
"Deposit accounts play a critical role in the lives of most Americans, but these products and the laws governing them are complicated," said the bureau's director, Richard Cordray. "Consumers need someone on their side to keep banks and credit unions accountable _ that is our job at the consumer bureau."
Last month, the agency launched a broad investigation of overdraft fees charged by banks and started soliciting public input on a new disclosure box about the fees on monthly statements.
The backlash against banks led to a broad overhaul of the financial system, including tough new restrictions designed to protect consumers. That has led banks to report a steep drop in revenue during the last few years.
For instance, new legislation halved fees that merchants pay when their customers make debit-card purchases. That led to a big decline in revenue in the industry and caused major banks like JPMorgan Chase & Co. and Wells Fargo & Co. to raise fees on checking accounts to help recoup anticipated losses.
Consumer advocates and bank consultants had expected even more fees to be levied on consumers. But those efforts appear to have subsided after the widespread public lashing suffered by Bank of America.
JPMorgan Chase consumer chief Todd Maclin said at an investor conference Tuesday that big banks lose money on most customers with less than $100,000 in deposits and investments. But he said it would be extremely difficult for banks to compensate by imposing new fees given the current hostile environment.
Unlike Bank of America, JPMorgan Chase is no longer testing new checking fees, a spokesman said. But industry analysts point out that banks must charge for their services _ it's just a question of how, and how much.
"Big banks need to pick their poison," said banking attorney Jeremy T. Rosenblum, a consumer finance expert at Ballard Spahr in Philadelphia.
"They can passively accept government-mandated revenue losses, or they can charge new fees and risk offending consumers and, worse, bureaucrats who have been given enormous power over them. I think that, sooner or later _ perhaps in many cases after the elections _ banks are going to have to take the political risk."
