I’m Going to Open My Own Bank

October 27th, 2010

Remember the days of free checking accounts? They may be coming to an end
It seems that the banks got a whiff of money and are going to substitute profit for service. I remember the good old days with some regret. I would walk into the bank and be greeted, by name if the teller knew it. Otherwise he or she just said, “and how may I help you today, Sir?” It’s not like that today although the young fellow where I bank is pleasant. On my last visit there was a young woman sitting in his seat with an open cellphone jammed between her shoulder and her face. We never exchanged a single word. I never got a greeting and in return she never got a thank-you. I hope her phone call was successful.

Free checking is ending.
The days when you could walk into a bank branch and open an account with no charges and no strings attached appear to be over. Now you have to jump through some hoops, keep a high balance, use direct deposit or swipe your debit card several times a month. One new account at Bank of America charges $8.95 per month if you want to bank with a teller or get a paper statement. Almost all of the largest U.S. banks are either already making free checking much more difficult to get or are expected to do so soon, with fees on even basic banking services.

Why the change?
It’s happening because a raft of new laws enacted in the past year, including the financial overhaul package, have led to an acute shrinking of revenue for the banks. So they are scraping together money however they can. Bank of America, which does business with half the households in America, announced a dramatic shift in how it does business with customers. One key change: Free checking, a mainstay of American banking in recent years, will be nearly unheard of.

The overdraft charge
In the last year, lawmakers in Washington have passed a range of new laws aimed at protecting bank customers from harsh fees, like the $35 charged to some Bank of America customers who overshot their account by buying something small like a Starbucks latte.

eBanking
To make up for lost fees, the banks started thinking of new products. In August, the bank introduced a new “eBanking” account, where customers were offered a free checking account if they banked online. The catch: If they opt for paper statements, or want access to tellers for basic transactions, they would be charged a monthly fee of $8.95.

Emergency cash
This summer, Bank of America also started offering “emergency cash” for a $35 fee to customers who went to the ATM for withdrawals that would exceed their bank balance.

The bank’s short memory
It seems to me that the bank has forgotten why they are in business and how they got to be in business in the first place. The original idea was to look after people’s money. If it wasn’t for our money (and my overdraft), the bank wouldn’t be in business at all.

This entry was posted on Wednesday, October 27th, 2010 at 3:38 am and is filed under Economy, Finance, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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