Free checking may soon be history at major banks, but we've still got those good old credit unions to fall back on, right?
Not for long.
Financial analysts anxious for some glimmer of optimism about the sorry state of consumer banking have been hyping credit unions like crazy lately. Why? Because all but the four largest credit unions have been spared the rod of financial reform that prompted the major banks to do away with archaic relics like free checking.
(As an aside, I'm not convinced that charging $12 a month for checking is going to make up for the $23.7 billion in annual overdraft fees they can no longer hit us with, but hey – maybe they'll start charging for lobby mints.)
Which places the nation's 7,000 credit unions in a bit of a dilemma. Yes, they could prove those sunny-side-up analysts correct and continue to offer free checking, just as they've done for years. In fact, that would seem to be in their financial best interest to attract the hordes of Americans looking to flee their banks in protest.
But remember, we're dealing with bankers here. And bankers, even gray-ponytail-cardigan-and-cords-wearing credit union bankers, are genetically coded to follow the money.
Put another way: where the bigs go, the credit unions will follow – these days sooner rather than later. Once they see the major banks getting away with it, they'll want checking fee income, too. Mark my words.
Heresy? Naw. Even a recent survey by the National Association of Federal Credit Unions found that two-thirds of its members are contemplating dropping free checking.
The other third must have been at a Zen retreat.
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