Financial services regulation that went into effect over the last year have made a big impact on banking. Now, several United States banks have started charging customers just for having a debit card. These fees are expected to affect between 40 million and 90 million customers.
The so-called Durbin fees
Some banks are calling new debit card and checking account fees “Durbin fees” because the interchange fee cap was part of the Durbin financial reform. Durbin fees are fees that the banks are charging to make up for the loss of revenue from the capping of debit-interchange fees. Interchange fees are charged by banks to process debit card transactions, and they have been capped at 24 cents. The fees previously averaged 44 cents per transaction.
Wells Fargo testing widespread fees
Since February, Wells Fargo has been testing fees on debit cards. Starting in October, Wells Fargo plans on charging a $3 per month debit card fee in Washington, Georgia, New Mexico, Nevada and Oregon. Those states are expected to bring in more than $200 million. If the fee does not anger or scare away too many customers, Wells Fargo intends on rolling out the fees nationwide. J.P. Morgan, Regions Financial Corp. and SunTrust Banks have all also rolled out similar fees, ranging from $3 to $5.
Avoiding banking fees
In the last few months, the cost of banking has gone up significantly. Many banks are cutting out reward programs and interest rates in an attempt to make up for losses from new fee limits. Shopping around with smaller banks can often save you money, as can reading the fine print on every agreement you sign in order to open an account. A credit union is also a legitimate option, as credit unions are not-for-profit and member-owned institutions, while banks are for-profit and stockholder-owned. Moving your accounts can be a hassle, but the savings in fees alone can be worth it.