In a recent survey of consumer experience with checking account fees, the ABA found that most consumers are able to maintain their deposit accounts at little or no cost. However, with over 14,000 financial institutions in the United States, it should be no surprise that consumers are losing out on their choice of services. At the same time though, while explicit monthly account fees may be flexible, the industry is getting to lose billions of dollars in debit interchange fees. That revenue is going to be re-introduced in a variety of ways that may be transaction-based, tied to exception activity, or represented in higher ATM fees for example.
“It’s impressive that so many customers avoid paying any bank fees,” said Nessa Feddis, ABA vice president, senior federal counsel and retail banking expert. “It shows that consumers are savvy and able to navigate the new banking landscape with skill. Often, avoiding bank fees can be as simple as maintaining a minimum balance or accepting a paycheck by direct deposit,” Feddis added.”
Therefore, while free checking will continue to be available to a broad base of U.S. consumers, fee for service is one likely place to pick up the slack in debit interchange fees, at least while borrowing is still depressed and the Fed funds rate remains at or near zero.