By Clare Morgan
nFinanSe, Inc.
As posted on The Huffington Post
The free checking accounts many Americans enjoy will soon be a thing of the past as banks scramble to find new ways to recoup overdraft charges and other fees they're no longer allowed to impose.
One bank which built its slogan around free checking is now charging $4.95 to as much as $15 a month for a checking account depending on the minimum monthly deposit and balance. Another, notorious for its excessive overdraft fees, is testing various fee packages, most slated to roll out in 2011. Many other banks are either in the process of doing the same or expected to follow suit.
Three Democratic senators led by Iowa's Tom Harkin have proposed some relief for increased banking fees in the form of capping ATM charges at just 50 cents. But seemingly, just as quickly as Congress lowers one fee, the banks increase another to make up the deficit with at least one now charging a monthly fee just for having a debit card. The only way to avoid the $3.95 fee is with $1,500 or more of activity each month.
The free checking boom has helped millions of low-income Americans join the mainstream banking system. Before that, these people routinely fell victim to the costly check-cashing stores still plaguing millions more.
Employers can be a big part of the solution and have the responsibility to help educate all of their employees about the changing financial services options available to them.
Already 17 million adults don't have a bank debit card, according to a Federal Deposit Insurance Corporation (FDIC) survey last year. This group doesn't have credit cards either in most instances - even before the current slate of fee increases. They can't make electronic purchases. They can't write checks. They can't accumulate money in an account for later use or to make larger purchases over time. They operate on a strictly-cash basis, consistently pay exorbitant fees for services many of us take for granted and forgo other conveniences completely. They are the un-banked.