Banks Take Credit Card Law Frustrations Out on Checking Accounts

Did lawmakers really think that banks would take this new credit card law lying down? As banks got slapped with tighter restrictions on how they can handle credit card billing and rate adjustments, the banks are trying to recoup some of those reduced profits by gouging their checking account holders. The costs always get passed back down to the consumers when big corporations are taxed or restricted; they never just eat the loss in profits – they try to make it up elsewhere. They work for their share holders, not their clients, apparently.

Here’s what’s going down according to USA Today:

In June, Bank of America will raise its monthly fee on certain checking accounts and impose a fee on accounts that remain overdrawn. SunTrust, meanwhile, is starting to charge customers a higher fee when they overdraw multiple times. Wachovia, now a part of Wells Fargo, has made it more expensive for some customers to transfer funds to cover overdrafts. And Citigroup has raised foreign-transaction fees on debit cards.

Basically banks are trying to encourage customers to incur overdraft charges, which now will be much more painful than ever. The corporations say they need to raise overdraft fees because the economy is so shaky and consumer behavior is riskier for banks these days.

Well, now there are all sorts of cries going up from consumer groups and government officials for more regulation to stop banks from charging killer fees on checking accounts. For example, Senator Bernie Sanders, an independent from Vermont recently demanded the following:

We need serious and major regulatory reform over these institutions or they will continue to rip off people in every way imaginable, with outrageous fees snuck in every single place.

Personally, I think it is possible to regulate banks to death. And before that happens the brunt of the regulation will continue to get passed on in the form of higher costs to us consumers. Here’s the summary from webfloss.com today:

Overall, the fees are likely to cost consumers $39 billion this year…We got hit with a $700 billion bailout and increased fees. Take your money to a Credit Union and just be done with it.