Exciting news courtesy of Dodd-Frank, et al: “Free” checking, isn’t

posted at 3:21 pm on September 24, 2012 by Erika Johnsen

I’ve yet to resolve my quandary over which of President Obama’s signature legislative ‘achievements’ I find more distasteful — ObamaCare, or Dodd-Frank. Yes, ObamaCare boasts the audacity of stomping on individual freedom, taking over an entire economic sector that particularly cannot afford to have its works gummed up by bureaucratic inefficiency (since there are actual lives at stake), and will strangle medical innovations, among many more ill effects; but the regulatory complexity of Dodd-Frank is going to rear its ugly head in so many different industries, expand government interference in the business world across a a whole host of different avenues, ensure that the biggest banks get bigger, and has escalated economic uncertainty to such a degree, that it’s quite the tough contest. Really, I am in a pickle.

I mean, the massive regulatory behemoth of financial reform that sidelines free-market competition in the ostensible effort to make those nasty, big bad banks offer more user-friendly services, is actually making everything more costly and inefficient for everyone involved? Who could’ve seen this coming? From the WSJ, emphases mine:

So-called free checking accounts are more expensive than ever, as the lumbering economy and new regulations squeeze bank revenues. …

Banks have raised fees on automatic teller machines, overdrafts and checking accounts for customers who don’t meet new standards tied to account balances or regular deposits. …

The fees come as the banking industry looks to lose more than $10 billion a year in revenue through federal restrictions on debit cards and overdraft policies, according to bank consultants. …

Customer fees are just one way banks are trying to step up profits. Most financial institutions also are cutting costs. Bank of America Corp., BAC -0.60% for example, is seeking to shed 16,000 jobs by the end of the year. …

Rising fees aren’t the only frustration to bank customers. Most traditional accounts these days earn next to no interest as the Federal Reserve seeks to keep rates at record lows, a strategy intended to jump-start the U.S. economy.

Behold, the hubris of the federal bureaucracy manifested in the form of widespread financial hindrance and borne of a regulatory bureau meant to “protect” us from private companies that dare to seek a profit by offering a useful service. Putting businesses in a costly chokehold, killing jobs, raising fees, engendering unprofitable accounts — gee, thanks, Consumer Financial Protection Bureau!

Going after financial institutions because of false advertising or outright deceit is one thing; pursuing cases against them because their customers supposedly can’t understand the fine print is another — and frankly, I don’t trust the right-away-wrong CFPB to distinguish which is which. Do these regulators understand that there are costs associated these transactions and services that must be paid for, and that by persecuting the banks, the price of these regulatory enforcements is inevitably going to passed on to the consumer in one way or another? Go after the credit-card lenders if you will, but understand that you’re inevitably making everybody poorer. The AP reports:

Discover Bank will pay millions in fees to settle accusations by regulators that it pressured credit card customers to buy costly add-on services like payment protection and credit monitoring.

Discover, the sixth-biggest U.S. credit card issuer, will pay a $14 million fine and refund $200 million directly to more than 3.5 million customers, federal authorities said Monday.

The company’s call-center workers enrolled customers in the programs without their consent, misled them about the benefits and left customers thinking the products were free, regulators said.

The action was brought by the new Consumer Financial Protection Bureau and the Federal Deposit Insurance Corp. Discover said this summer that it expected an enforcement action about add-on products.


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Both of these crooks should be in jail.

bob77 on September 24, 2012 at 3:22 PM

Isn’t this part of Liz, not a lawyer either, Warren’s work ?

Jabberwock on September 24, 2012 at 3:29 PM

I suppose it would be too much to ask if they’re still offering free toasters for new account openings?

Shy Guy on September 24, 2012 at 3:29 PM

Customer fees are just one way banks are trying to step up profits. Most financial institutions also are cutting costs. Bank of America Corp., BAC -0.60% for example, is seeking to shed 16,000 jobs by the end of the year.

I saw that headline last week about the mass layoffs at Bank of America(BTW, are we allowed to call them that again now that the Dem’s convention is over?). Is that directly related to Dodd-Frank? If so, Romney’s gotta nail Obama over that. I don’t think Wall Street “reform” will remain all that popular if people realize what it’s gonna cost this economy.

Doughboy on September 24, 2012 at 3:30 PM

I want my free stuff…

PatriotRider on September 24, 2012 at 3:33 PM

Dodd-Frank, Sarbanes-Oxley and Obama’Care’ will have destroyed the free land, from the inside.

The muzzies and PC will complete the demise.

Schadenfreude on September 24, 2012 at 3:35 PM

Shy Guy on September 24, 2012 at 3:29 PM

Yes, free toasters are still part of opening a new account.

You bring in a new toaster, still in the original box, high end, not one of those K-Mart specials, and also your first-born child…if both are accepted by the bank, you may be invited to open a new account.

coldwarrior on September 24, 2012 at 3:36 PM

Fortunately I have direct deposit for one of my free checking accounts, else I would have a fee checking account.

Thank you, Dud-Fwanks.

VibrioCocci on September 24, 2012 at 3:39 PM

One thing you can say about bho/team since elected, they get their BOHICA on everything they put their slimy hands on!

I have been with my small town bank since 1980 and they are real jewels in the way they treat me. I have no idea if this will impact me, but it is what it is!

Unless we get rid of bho/team and see to it R&R will help out our nation, we are not going to be a nation much longer, IMO!
L

letget on September 24, 2012 at 3:40 PM

Quick, somebody get urban elitist in here to explain why the laws of economics which work every time, don’t really work! Despite all we know from history and common sense… this time it’s gonna be different!

The Left passed legislation… it’s gotta work!

/

mankai on September 24, 2012 at 3:40 PM

Do these regulators understand that there are costs associated these transactions and services that must be paid for, and that by persecuting the banks, the price of these regulatory enforcements is inevitably going to passed on to the consumer in one way or another?

I’m not sure you understand. They do know but they don’t care since their real mission is to take this country down a peg or two. They want to keep control, know matter the cost, and their strategy to achieve this is to build a larger and larger underclass that is dependent on the government. This group will continue to vote “democrat” for the rest of their lives. Their tactics include legislative BS like Dodd-Frank that are always under the guise of “protecting the American people”. Geez.

yubley on September 24, 2012 at 3:42 PM

sure, thats the downside, but too big to fail is now fixed and we got all the AIG FNMA and freddie money back, right?

t8stlikchkn on September 24, 2012 at 3:44 PM

OT – Cutter delusional or lies through her teeth, just like Obama.

Women not concerned over the last 4 years

Schadenfreude on September 24, 2012 at 3:46 PM

The AP reports:
Discover Bank will pay millions in fees to settle accusations by regulators that it pressured credit card customers to buy costly add-on services like payment protection and credit monitoring.

Erika, also from the AP on this:
“Discover’s telemarketing scripts included misleading language that confused consumers about whether they were buying a product or just agreeing to consider it, the agencies said. They said telemarketers spoke quickly during the part of the call where the prices and terms of products are described.”

I have some sympathy for the customers here as I’ve known more than my share of old folks who’ve been badgered and misled over the phone by fast-talkers into buying some meaningless “service”.

whatcat on September 24, 2012 at 3:47 PM

Fortunately I have direct deposit for one of my free checking accounts, else I would have a fee checking account.

Thank you, Dud-Fwanks.

VibrioCocci on September 24, 2012 at 3:39 PM

I have direct deposit as well, but still got hit with a $12 service charge when they changed their rules for the 2nd time in 3 months. My wonderful employer pays me weekly, so I don’t have one monthly direct deposit that is over the banks requirement to avoid a charge. I am $12 short every week of reaching the amount. If I were paid monthly I would be nearly 4 times what is required. Yeah, that makes sense.

Add in my wife’s weekly direct deposit, and combined we are 1.75 times over the weekly requirement…but that is 2 separate deposits, even though they both go through at midnight on the same day.

At least there was another option to avoid the fees. The bank also carries my mortgage, and there is no fee so long as you have automatic payments set up on your mortgage. So instead of me transferring funds to it on my own and getting several months ahead on payments, I now do an automatic transfer on the due date because the bank won’t let me schedule the automatic withdrawls to occur earlier. This essentially means I am holding on to my money right up to the due date instead of earlier. The bank now waits longer to get my cash. Yeah, that makes sense.

weaselyone on September 24, 2012 at 3:51 PM

The CFPB is an utter monstrosity. It is the finance equivalent of the Ocare Death Panels.

CorporatePiggy on September 24, 2012 at 3:52 PM

Life dealing with financial institutions is so much more pleasant once you move to a credit union. You’ll never go back to a bank again.

search4truth on September 24, 2012 at 3:53 PM

OT

– Cutter delusional or lies through her teeth, just like Obama.

“Women not concerned over the last 4 years“

Schadenfreude on September 24, 2012 at 3:46 PM

Just tracked that one down. Thanks.
Ol’ Steffie just articulated the Obama general campaign stategy :
Forget about the last four years.
Nice.

Jabberwock on September 24, 2012 at 3:56 PM

Erika, you have to post this.

A MUST SEE.
The ever elegant Axelrod.

MontanaMmmm on September 24, 2012 at 3:57 PM

Compliance costs that large mega banks can absorb will drive small community banks out of business. Just another of the perks of Dodd-Frank.
Somebody already said it, but both these guys should be in jail.

tj4osu on September 24, 2012 at 4:02 PM

I can afford the typical $1000 or $1500 now needed to avoid fees?

How about you, Obama voting chump?

MNHawk on September 24, 2012 at 4:02 PM

But…but…but isn’t everything supposed to be FREE?

GarandFan on September 24, 2012 at 4:04 PM

Compliance costs that large mega banks can absorb will drive small community banks out of business. Just another of the perks of Dodd-Frank.

tj4osu on September 24, 2012 at 4:04 PM

Progressive legislation always tells you who the recipient of the pain will be. In this case, the consumer protection act targets the consumer for punishment.

tom daschle concerned on September 24, 2012 at 4:05 PM

They want to keep control, know matter the cost, and their strategy to achieve this is to build a larger and larger underclass that is dependent on the government. This group will continue to vote “democrat” for the rest of their lives. Their tactics include legislative BS like Dodd-Frank that are always under the guise of “protecting the American people”. Geez.

yubley on September 24, 2012 at 3:42 PM

Yeah, so why do we have Republicans offering to figure out how to extract enough labor from the producers to keep paying for all these government dependents?

Romney: I WILL MAKE SOCIAL SECURITY AND MEDICARE Solvent FOR GENERATIONS! paraphrased, but you get the idea…

astonerii on September 24, 2012 at 4:21 PM

Dude … get a load of the salary levels at the CFPB. I went and looked at the “jobs” link. Good lord, there’s a lot of six-digit combinations being thrown around on that site / in that bureau.

David on September 24, 2012 at 4:25 PM

Everything anyone needs to know about the Dodd-Frank law in one sentence: It was created by two of the most despicable-ever members of Congress who were key architects of the 2008 financial, banking and housing collapse in America and who spent a lifetime sucking-up benefits and kick-backs (like Countrywide below-market-rate loans) from the financial and banking industries for their own personal benefit in return for legislation that helped secure their benefactors multi-BILLION dollar profits.

TeaPartyNation on September 24, 2012 at 4:26 PM

You put YOUR money into the bank, they pay you nothing for the use of your money or very, very little and in some cases, they charge you to keep YOUR money.
They let losers BORROW YOUR money for little to no interst and at times they even do not require them to pay back YOUR money and that is why you earn nothing and may even have to pay to let someone borrow YOUR money.
The forgivance of loans and foreclosures and equity loans and student loans etc are telling people they don’t have to pay your money back. These people walk away with new SUVs and big discounts on their houses with little or no payment and a free education. They did not have to fight and risk their life like a military person, they just had to be a loser.
Now you know why you get no interest on YOUR money in the bank and why they charge YOU to keep YOUR money and you know why LOSERS vote for Liberals. They pander to them at YOUR expense.

j bo on September 24, 2012 at 4:28 PM

Discover Bank will pay millions in fees to settle accusations by regulators that it pressured credit card customers to buy costly add-on services like payment protection and credit monitoring.

I’ve had a Discover card for over 15 years (was an “emergency only” card dad covered when I was 16, and my card and bill once I was 18).

I have never had any of their add-on services at any time.

How did I avoid the pressure Discover illegally imposed on its customers?

I said “no” when they called and asked if I wanted this new service, 30 days free, then a monthly charge…

Apparently saying “no” isn’t a common sense way to avoid paying more for a service you don’t want… it’s a magical trick that few people on the planet know of?

If we’re going to assume people don’t know how to say “no” exactly what form of advertising IS legal?

gekkobear on September 24, 2012 at 4:32 PM

If we’re going to assume people don’t know how to say “no” exactly what form of advertising IS legal?

gekkobear on September 24, 2012 at 4:32 PM

I tell them off the bat that I never will take any of their offers. I get two or three calls, after that, they never call again.

I had one card that did call, I wrote the bank an email explaining why i have a credit card and that I do not want any more offers. I got one more call a few days later and none after.

They understand the value of their marketers… They are not going to waste them on a sure loser phone call.

astonerii on September 24, 2012 at 4:35 PM

Isn’t this part of Liz, not a lawyer either, Warren’s work ?

Jabberwock on September 24, 2012 at 3:29 PM

Lizzy may have worked for it, but Scotty Brown voted for it.

kringeesmom on September 24, 2012 at 4:53 PM

Lizzy may have worked for it, but Scotty Brown voted for it.

kringeesmom on September 24, 2012 at 4:53 PM

GASP!

astonerii on September 24, 2012 at 4:55 PM

everything
is
free!

KOOLAID2 on September 24, 2012 at 5:04 PM

The banks promised that they would never charge an ATM fee.

So I have no pity for them now.

The overdraft fees are also a complete rip off. Many banks force these by putting long holds on deposits with no notice and no valid explanation for the hold. They universally have too high fees. Let’s face it the bank makes tons of money on overdraft fees. They lose almost nothing because they do not pay the checks just charge a huge fee.

The banks have defrauded the poor constantly to provide the middle class with free services.

I am sorry but although Dodd Frank stinks on ice. Something needed to be done to force banks to keep promises and to not fund themselves by ripping off the poor.

Steveangell on September 24, 2012 at 5:12 PM

If we’re going to assume people don’t know how to say “no” exactly what form of advertising IS legal?

gekkobear on September 24, 2012 at 4:32 PM

You are young at least in mind.

It is the old and others that do not sound too smart they rip off. Are you actually defending that?

These are not the ads that come with your bill. Those are fine. To answer how they can advertise.

Steveangell on September 24, 2012 at 5:15 PM

Ha… When you read this article on the LA Times they explain a lot about WHAT is happening but this is the only mention of WHY: “As banks respond to the tough economic times and new regulations”

More omission reporting by the left.

flstc on September 24, 2012 at 5:36 PM

These fees should be known as “Durbin Fees”, because his was the giant intellect that thought it would be a good idea to limit interchange fees between merchants and the card companies. The card companies and banks had to make up the difference somewhere.

DaveyNC on September 24, 2012 at 5:45 PM

I have a discover card. I actually took the identity protection and have had it for about two years. I wonder if I will get a refund, lol.

I don’t know how they determine who gets paid on these massive class action suits. I got a check from Blockbuster once from one though I had no idea I was a plaintiff.

Someone suggested credit unions. I eliminated my checking account with my credit union because they were charging me 50 cents for every check, $2.00 a month for a paper statement and $5.00 a month to be able to do business at the bank with a teller.

If you were ever military or are the child of a vet I suggest looking into USAA Federal Savings Bank. It’s completely online, they reimburse ATM fees up to $15.00 a month (US Bank does not charge a fee for USAA debit card)and you get free checks. Checks can be scanned into the computer for deposit or by using an app on your smart phone.

Just saying. I have been with them for years and they are the best.

Jvette on September 24, 2012 at 8:22 PM

Just saying. I have been with them for years and they are the best.

Jvette on September 24, 2012 at 8:22 PM

Good to know all that info…

I have USAA for my home insurance. Maybe I can increase their business with a checking account.

astonerii on September 24, 2012 at 8:58 PM

astonerii on September 24, 2012 at 8:58 PM

They are a great insurance company too! Also, when you use them for multiple services, you get a lower rate on your insurance.

Like I said, I have been with their banking for years and their insurance since 1981.

Great company that used to be only available to officers but has been opened to all servicemen/women and their dependents for quite a few years now.

Jvette on September 24, 2012 at 9:40 PM

Let’s all say it together… “It’s not a bug, it’s a… “

Midas on September 24, 2012 at 9:50 PM

Let’s all say it together… “It’s not a bug, it’s a… “

Midas on September 24, 2012 at 9:50 PM

It’s not a bug, it a Republican idea that any number of Republicans would have proposed? McCain, Brown, Maine Sisters, Graham, Murkyclowsky for instance…

astonerii on September 25, 2012 at 8:10 AM