Will Banks Charge Higher Fees in the Future on Debit Cards and Checking Accounts?

by ReadyFUND$ Payroll Card

The simple answer to this question is: “it depends”.  What does it depend on?  It depends on whether or not the regulations passed by the Federal Government will continue in force, be modified, repealed or possibly even be expanded.  Ever since the housing market meltdown the Federal Government tried to protect consumers from businesses; but it really needed to protect them from government regulations as well.  What does that mean?  It means in 2005 when congressional leaders pushed for Fannie Mae to make more home loans to people, the banks complied and made more loans.  When the housing bubble burst, the Federal Government immediately began pointing fingers at Wall Street and the banking industry for generating a profit by making risky loans to under qualified buyers. Never mind that congress was pushing in that very direction or that consumers were applying for loans on houses they knew they couldn’t afford.  Ok, so how does that impact fees on checking account and debit cards?  The Dodd Frank Bill pushed through congress to protect consumers from Wall Street and banks contained many different components.  One of those was the Durbin Amendment which significantly reduced the fees retailers pay banks for accepting debit cards.  There were also new regulations passed to modify the prices banks can charge consumers on checking account overdrafts.  Finally the Federal Government is heavily scrutinizing loans made by banks and banks have cut way back on lending to avoid scrutiny.  The result of this type of Federal Government regulation is lost business and revenue for the banking industry well beyond what was called for, and eventually they will need to compensate for it somewhere somehow.  What are the alternatives for hard-working consumers?  One option might be to consider a prepaid debit card.  Although these cards do have some fees, they may be less than what your bank may charge for a traditional checking account, you can’t overdraw them and everyone can qualify. Paycards or Payroll cards are one of the best options for prepaid debit cards because they are provided by employers at no cost and employees receive and can access their pay at no cost each time they are paid.   Will there be higher debit card and checking account fees in the future?  Hard to know at this point but one thing’s for sure, the more the Federal Government tries to dictate and control the outcome of “free enterprise”, the less “free enterprise” there will be and that will never be good for hard-working U.S. consumers.