There’s a lot of kerfuffle about Bank of America’s fee revamp including the end of free checking for many customers:
Bank of America Corp. is working on sweeping changes that would require many users of basic checking accounts to pay a monthly fee unless they agree to bank online, buy more products or maintain certain balances.
The plan by the nation’s second-largest bank by assets is the latest sign of stresses in the banking industry at a time of low interest rates, slow economic growth and new rules limiting many types of service charges. Many other big banks, including J.P. Morgan Chase & Co.—the nation’s largest—and Wells Fargo & Co., have rolled out plans that aim to raise fee revenue or push customers to do more business with the bank.
Those efforts are tricky, because they risk upsetting the banks’ best customers or drawing fire from politicians. Bank of America retreated last fall from a new $5 debit-card charge following a customer revolt and a wave of criticism.
One of the things I noticed when I was going through my mom’s papers after her death a couple of years ago was that my parents, despite running pretty high balances, paid a few for checking through the 1950s and 1960s and my mom continue to pay a fee for checking throughout the 1970s.
I believe that free checking as most people have experienced it was a response by small, independent banks to competition from big banks, the big banks have always hated free checking, and they only began offering it themselves about twenty years ago. Perhaps someone with more certain knowledge can correct me on that.
However that may be free checking isn’t a law of nature and as margins tighten (as they inevitably will) I think we can expect the big banks to extract money from us in any way they can. That includes an end to free checking.
Originally, free checking was limited. There were minimum balances in the checking or a savings account, and there were a limit on the number of checks per month. Violating either incurred penalties. Free unlimited checking was not offered for many years, but I think they still required a minimum balance.
At the time ATM withdrawals were free, but I doubt we will see those fees dropped.
The increase in free checking may have been due to the Fed allowing checking sweeps, but I am not sure about the dates of either.
“For the Snark was a Boojum, you see.”
I remember free checking started to become widely available in the mid-late 1980’s.
As for the big banks, I still don’t understand why anyone would bank with them. Much better deals with none of the hassle can be found with a good credit union.
No kidding Andy. Had a big bank in grad school back east…horrible experience. Switched to a small local savings and loan…loved it. No, it was a well runs S&L and didn’t go through the melt down. Not sure it was actually still and S&L though something like that was in the name.