While many major financial institutions have been hit hard by the provisions of a number of new federal laws, consumers may not be too happy about the new fees banks are charging to recoup revenue, according to a report from American Banker. A tactic known as relationship pricing is seen as the likeliest to succeed under the new regulatory climate.
“It’s the implicit recognition that the mind-set that has prevailed until now is finally gone, which is … that a checking account is kind of like the entry-level gateway to a broader financial services relationship,” Ron Shevlin, a senior analyst at the Aite Group LLC, told the news agency. “That has failed miserably.”
Bank of America, JPMorgan and Citigroup have all drastically altered their accounts in recent months by linking them to hide or otherwise disguise some of the fees they added, the report said. The latter two have introduced greater rewards points for consumers who use more of their financial products, while the former has waived some fees for doing so.
Consumers may balk at banks eliminating free checking accounts and other old perks, but it’s unlikely that lenders will simply accept smaller profit margins as a result of these laws, meaning these fees are probably here to stay.