But while you were celebrating, banks got busy finding new ways to recoup that money.
Now they've implemented new, inconspicuous tactics to charge fees – ways so under-the-radar they haven't (yet) triggered damaging customer backlash.
"Banks tried the in-your-face fee with debit cards, and consumers said enough," Alex Matjanec, co-founder of MyBankTracker.com, told The New York Times. "What most people don't realize is that they have been adding new charges or taking fees that have always existed and increased them, or are making them harder to avoid."
So if you haven't paid close attention to your statements, or haven't been monitoring communication from your bank, you could be facing exorbitant new costs – just to keep banking in the same manner you have for years.
Your New Banking Fees
Bank of America was one of the last big banks to scrap plans for a monthly debit card fee. SunTrust Banks Inc. (NYSE: STI) and Regions Financial Corp. (NYSE: RF) had already ended their programs and reimbursed customers, while JPMorgan Chase & Co. (NYSE: JPM) and Wells Fargo & Co. (NYSE: WFC) cancelled program testing.
But that hasn't stopped them from looking for new ways to stick it to customers.
The most common charges banks have implemented or proposed include a monthly fee for personal checking accounts, cash wiring fees, ATM withdrawal charges, and higher payments to receive paper statements.
Some specific fees that banks have hoped to slip by you include:
- Bank of America will charge $5 to replace a lost debit card – $20 if you want rush delivery – and will charge $6 to $25 in monthly checking account fees.
- TD Bank will impose $15 for each cash wire to your account.
- Citigroup Inc. (NYSE: C) will charge $10 a month for basic checking accounts.
- And U.S. Bancorp (NYSE: USB) will charge 50 cents per check deposited via mobile banking.
Banks also are raising minimum account balances and charging account-closing fees, making it practically impossible for you to avoid extra costs in some cases.
Banks blame increased regulations that limit fees and other charges for wiping out an estimated $12 billion in yearly income. Now it costs banks between $200 and $300 a year to maintain a retail checking account, but they only take in about $85 to $115 in fees per account per year.
In fact, more than half of all checking accounts are unprofitable for banks, according to a study released last year by consulting group Marsh & McLennan Cos. Inc. (NYSE: MMC).
Banks also have lost money on cash they're holding due to few investing or lending options, depriving them of as much as $8 billion in income.
"They have got to make up the income some place," Vernon Hill II, founder of Commerce Bank, told The New York Times. "I think we will see a lot more fees."
A Pew Charitable Trusts study last year found that bank customers could get slammed with as many as 49 different fees for one checking account.
Additionally, banks have lowered the rates they pay on deposits. The average interest rate slipped to 0.74% from 0.8% in the first six months of this year, according to Market Rates Insight. The small adjustment means about $1.5 billion that goes toward bank profits instead of customers' accounts.
Banks Risk Losing Customers
Banks know there will be some customer complaints once the fees are discovered, and have made it more difficult to switch accounts to cheaper options.
Still, the outrage over debit card fees pushed some customers away from banks and into nonprofit credit unions. About 650,000 customers have transferred to credit unions over the last month, bringing about $4.5 billion in new savings accounts, according to the Credit Union National Association.
Part of this was due to the Facebook-promoted Bank Transfer Day on Nov. 5, urging customers frustrated with new fees to pull their money out of banks.
The risk of angering customers has caused some institutions to rethink planned charges. Chase announced yesterday (Tuesday) it would end trials of new banking fees by Nov. 19. Those include a $12 monthly account fee that can't be waived through direct deposit or online banking requirements, and a $15 monthly account fee only waived if customers maintain a minimum daily balance of $1,500.
The bank was planning a $3 debit card usage fee, which it dropped. Chase did not say if it would reimburse customers who incurred charges during the trials.
Chase will maintain its current monthly $12 account fee that will be waived for customers who make direct deposits totaling at least $500, carry a $1,500 minimum daily balance or have an average daily balance of $5,000 or more between linked deposits or investments.
But many banks are still proceeding with plans to charge customers more. Policymakers have tried to get the Consumer Financial Protection Bureau (CFPB) to provide a more informative disclosure form so customers wouldn't be blindsided with the new banking fees.
"Simply put, consumers have had enough of banks that try to sneak fees past them that are hidden in fine print or imposed with no notice at all," wrote Sen. Richard J. Durbin, D-IL, and Sen. Jack Reed, D-RI to the CPFB.
Durbin authored the provision that limited retailers' debit card fees and sparked banks' attempts to charge more for debt-card usage. When Bank of America dropped its planned fee increases he said he hoped banks got the message that customers wouldn't stand for such charges.
"I hope the banking industry learns from this," Durbin said to reporters on Capitol Hill.
Learn they did – to be more sneaky.
News and Related Story Links:
- Money Morning:
Big Banks Are About to Get Blasted by the Volcker Rule
- Money Morning:
One Man's Mission: Building the World's Safest Bank
- The New York Times:
Banks Quietly Ramping Up Costs to Consumers
- CBS News:
New bank fees flying under the radar
- The Washington Post:
Commentary: Credit unions reported a surge in membership after Bank Transfer day. Now what?