Thanks big government!
…banks are trying to recoup approximately $30 billion a year in lost overdraft fee income by testing $5 ATM fees, Consumer Action spokesman Joe Ridout told CNBC.
These banks have “historically been reliant on overdraft fees,” he said, so they’re “coming up with new ways to make up the difference.” He said higher ATM fees and other rising costs penalize small depositors.
Nessa Feddis, spokeswoman with the American College of Consumer Financial Services, agreed there are “enormous pressures on banks because of lost revenue.” …
She blamed “price controls that the government is imposing” for drastically limiting debit card interchange fees.
“Those debit card interchange fees — and you’re talking about a penny on the dollar — basically not only provide value to the merchant but they also support the cost of providing debit cards and checking accounts. Until now, we’ve been lucky with (banks offering) a lot of free accounts. I think we will see that go away.”
Two of the major pillars of the Dodd/Frank banking reform bill pushed through by Democrats last year was a limit on what banks could collect in overdraft fees, and a limit on fees they could charge for swiping your debit card. The result is what we’re seeing above. Banks are recouping those lost revenues by charging bigger fees in other areas and charging more for their services.
Some reform, no?
On overdraft fees, it seems fitting that those who overdraw their accounts bear the feel that goes along with it. But now, thanks to the federal government, we’re all going to bear that burden with higher overall fees.
As for debit card swipe fees, it seems as though the debit card market was doing just fine without this “reform.” There’s been rapid growth in the number of people using debit cards, meaning that the fees associated with using them were deemed appropriate by the market. But, again, the federal government stepped in and “fixed” it for us, and now banking costs us more.
Your tax dollars, hard at work.