On July 21, 2010, President Obama signed new bank regulation laws limiting when and how financial institutions can charge customers for services like overdraft transactions and ATM withdrawals. While designed to protect consumers from exorbitant fees, these laws may have had the opposite effect, as many banks are finding new ways to make money and charge consumers.
In fact, because of these new regulations, many financial experts are predicting the end of free checking unless certain requirements are met. While college accounts are mostly unaffected by these new changes, many “mega” banks including Wells Fargo, Fifth Third Bank and JPMorgan Chase are instituting a monthly fee on previously free checking accounts, unless consumers make a monthly direct deposit more than a certain amount, maintain a minimum balance or make a certain number of purchases each month.
So here’s a preview of the changes coming at 5 major banks and how to avoid paying more under these new bank overdraft fee laws:
When it begins: Transition to be completed at the end of 2011
New Fee: $8.95/month
How to Avoid: Opt for an online account which allows you receive statements online and use ATMs. Getting a paper statement or talking to a teller could cost you $8.95.
New Fee: $15.00/month
How to Avoid: Keep a $5,000 total balance in linked checking, saving and investment accounts OR deposit at least $2,000 monthly or used a linked credit card once a month
When it began: February 2011
New Fee: $12.00/month
How to Avoid: Maintain a balance of $1,500, make monthly direct deposits of at least $500
New Fee: $6.00/month
How to Avoid: Make a direct deposit of at least $500/month or make five debit card purchases
When in begins: September 2011
New Fee: $8.00/month
How to Avoid: Make five or more monthly transactions including direct deposit, debit card purchases, bill payments, check payments and ATM case withdrawals
New Fee: $20.00/month
How to Avoid: Maintain a $6,000 monthly balance in linked accounts
When it begins: Began in July 2010
New Fee: $5.00/month
How to Avoid: Maintain a minimum balance of $1,500 or make monthly deposits of $250
No change announced