Big banks are going on another checking account fee frenzy

Yield sign with dollar signs

Here come the fees. Again.

With regulatory changes this month cutting into their profits, the nation's largest banks are looking once again to squeeze their customers for new revenue.

And what do we get for these new checking account fees? Nothing.

Citibank is the latest to announce a new charge. Later this year, it will add a monthly $15 fee to its once free Easy Checking account for any customer who doesn't have a minimum balance of $6,000.

This news comes just days after Bank of America confirmed it would charge a $5 monthly fee for using a debit card to make purchases.

BofA's brazen move stands to be the first nationwide blow to free debit cards but likely not the last.

Chase and Wells Fargo have both launched regional pilot programs to test customer pain tolerance for a $3 monthly debit card fee.

If banks have their way, more money will come out of your pocket, one way or another.

But you shouldn't stand for this latest scheme.

The banks hope you're not paying attention. They hope you don't realize, though it's getting more difficult, you can still land a free checking account.

And they'll keep pinching us until we scream.

"New fees are limited only by bankers’ creativity and their ability to get customers to accept them," warns Jean Ann Fox, director of financial services for the Consumer Federation of America.

So, why are we here?

The financial crisis of 2008 set in motion an ongoing cat-and-mouse game in which Congress and federal regulators cracked down on blatant forms of profiteering by banks and financial institutions.

In 2009, the long-overdue Credit CARD Act clamped down on credit card interest, rate hikes, overdraft fees and late charges.

Last year, the so-called Regulation E prohibited banks from charging for overdraft protection plans without expressed customer consent, effectively ending that lucrative scam. According to the Consumer Federation of America, fee-based overdraft programs alone cost customers $23.7 billion each year.

And most recently, on Oct. 1 the Fed cut in half the maximum interchange or "swipe" fee the big banks can charge merchants per debit card transaction from 44 cents to 24 cents. Actual cost of said transaction: about 4 cents.

This was a battle in Congress between the banks and retailers with unfulfilled promises the consumer would benefit.

"The sad thing about regulations is, they're all well-meaning, but their short-term effect can be just about the opposite of what the regulators have been trying to achieve," says Adil Moussa, senior analyst with AITE Group, a Boston-based financial research and consulting firm.

As the government dams up these revenue streams, banks have regrouped and retooled their services, resulting in new fees for everything from checking accounts to paper statements, all designed to replace the billions they lost to financial reform.

One of the first victims of the new banking normal was free checking, a staple of consumer banking for the past two decades.

Bankrate's 2011 Checking Account Survey found that less than half (45%) of all noninterest checking accounts remain free today, down from 65% last year and 76% the year before.

In many cases, customers can avoid the new fees by maintaining a minimum account balance, total bank deposits or direct deposit volume.

Here's a snapshot of new checking fees at America's largest banks:

Debit card rewards programs also are on the endangered species. Chase, KeyBank, SunTrust, TCF Bank, USAA, Wells Fargo and many others have long since dismantled theirs.

Banks have found a number of creative ways to slip in new fee structures: Bank of America raised its ATM fees to $3; Wells Fargo now charges $2 for images of canceled checks and $10 if you use your savings account to cover an overdraft; SunTrust introduced a $4 monthly fee to its student checking accounts; and Chase has piloted raising noncustomer ATM fees from $3 to $4 in Texas and $3 to $5 in Illinois.

What fresh new fees might be headed our way from our banks?

One likely place to watch is mobile banking. Chase and U.S. Bank recently started charging a fee to make a remote deposit by smartphone. Moussa predicts more mobile fees will be forthcoming.

"Most of the (mobile) platforms allow you to charge for all of these fees; it's just that banks have been absorbing those fees," he says. "Somehow they're going to have to recoup that loss."

Pending the outcome of the Chase and Wells Fargo pain pilots, Moussa says banks may toy with debit card fees, both for the revenue and as a way to steer consumers to a lucrative old product that's gaining renewed interest: the credit card.

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