In her column, Jean Chatzky writes,

Banks have already figured out that they stand to lose big bucks in interest and fees because of the federal Credit Card Accountability, Responsibility and Disclosure Act.

Not surprisingly, they’re looking for ways to make up that ground even though much of the law doesn’t take effect until February. Nonetheless, new fees and charges are on the way. Add that to frequent fee increases and it reinforces that you need to be a careful consumer.

This Wall Street Journal headline caught my eye:  In Banks Profit Push, “Era of Low Fees is Over”.      From the story:

“All depositories are trying to raise any little fee, whether on loans, deposits or transaction accounts,” said Mike Moebs, founder of Moebs Services Inc., which collects data on fees from nearly every U.S. bank and credit union. “The era of low fees is over.”

The upward trend reflects pressure on bank executives nationwide to turn in profits — or at least minimize losses — as loans to homeowners and businesses turn sour.

According to the article in U.S. Banker,

It’s an understatement to say that banks had a rough go of it in 2008; consumers too. And NSF fee income may be rising as consumers struggle to pay their bills, but institutions counting on this rising revenue stream to counterbalance other declines should be on the lookout for both consumer and regulatory blowback.

…Bankers need to hold onto and grow deposits, but angst about overdraft is a leading cause of customer attrition. So as NSF charges multiply, flight risk increases.

…”People are becoming quite sensitive to the fees that they are paying,” Rubin says. “Banks may try to recoup some of their losses by fee revenue, the double-edged sword is that consumers are paying more attention.”

From the Wall Street Journal’s Personal Finance Blog, The Wallet:

Personal Finance:
Trying to decide which kind of bank fee is worst is kind of like deciding where you’d rather be punched. A glance at which is worse: a bounced check, a late penalty on a credit card payment or a payday loan.

The debate is starting to pick up.  From an article in the Iowa Independent: 

A report (pdf) on banking practices prepared by the consulting firm Bretton Woods for the payday lending industry was released Friday, indicating that Iowans pay over $321 million annually in overdraft fees.  That works out to more than $300 per household in the Hawkeye state, which seems high, but it is below the national average.  The Bretton Woods report also claims that banks and credit unions employ strategies to maximize the overdraft fees they charge their customers by reordering debits and withdrawals.

Some quick research indicated that state governments probably don’t have the power to regulate bank overdraft fees — at least not those assessed by big, national banks — in the same ways that they can regulate payday loans, which further complicates things for the state legislature.

The 2009 world of banking.   From the article: 

“Fee income has become an important diversifier for bank revenue, and the current environment underscores that importance,” said Greg McBride, senior financial analyst at researcher Bankrate.com in southern Florida.

A segment on the Today Show this morning warns consumers to watch out for hidden fees and gives advice on what to look out for.  According to the story, it is estimated that U.S. consumers collectively pay at least $216 billion in financial fees each year. That works out to about $750 a person in miscellaneous fees.

Fees on credit card bills

• Late payment fees: $19-$39
• Over the limit fee: up to $39
• Default rate: over 30 percent APR

Fees on checking accounts

• Bounced check fees: $35-$45/check
• ATM fees: up to $5.50/withdrawal (up to $3/each from issuing bank, up to $2.50 from own bank)
• Check copy: $3-$10

Is there any question why payday loan customers appreciate the option?

From a letter to editor in today’s Cleveland Plain Dealer

Bank fees will have you longing for a payday loan

Posted by Raphael W. Hardman/Cleveland November 20, 2008 11:31AM

That’s the thrust of this Christian Science Monitor story on how to beat bank fees.

Bank fees are on the rise and don’t expect them to go down anytime soon according to the Chattanooga Times Free Press.

The Federal Reserve Bank’s recent interest rate cuts may have provided some relief for consumers, but banks have been left looking for other streams of revenue to compensate.

For many banks, that additional revenue comes in the form of fees charged to consumers.

The article also attributes the rise as an attempt by banks to compensate for low-balance ‘free’ checking accounts which “don’t bring in much money and may actually cost the bank money.” 

Ouch! Fine print can be costly.