New fees could drive millions to join the 'unbanked'

  • Article by: CHRIS SERRES , Star Tribune
  • Updated: February 13, 2011 - 10:29 AM

Some say the end of free checking could lead many to drop accounts. Others say big banks are using scare tactics as part of a lobbying effort.

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DanW52Feb. 12, 1110:02 PM

Since it's not free for a bank to initiate and maintain a checking account, it's fair that a periodic fee be charged - it's direct fee for service. But the bank's fees should be proportional to the cost of the account, and not free if you keep in a minimum amount - like $1000. That way the fees are minimal because everyone pays them.

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bottomlineFeb. 12, 1111:08 PM

This is stupid. See folks, if we had just stuck with the original way of doing business (free checking plus YES to overdraft fees) ...all we would have needed to do is KEEP A MINIMUM BUFFER AMOUNT ON THE BOTTOM OF OUR CHECKING ACCOUNTS ...and things would've been fine. The buffer minimum in our accounts would've made the overdraft fees to be $0.00 PLUS PLUS PLUS the monthly fee would've been $0.00 (free checking). EVERYTHING WOULD'VE BEEN TOTALLY FREE. Now ...it's a mess.

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morejusticeFeb. 13, 11 1:09 AM

They forgot to mention banks using TARP money to write off credit card debt of bums who ran up credit card debts of over $120K! They made up the money by screwing all the people who were responsible with larger fees!

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gwbuddyFeb. 13, 11 5:25 AM

"There Ain't No Such Thing As A Free Lunch". Maybe when we were kids, and our parents bought our meals at McDonald's. Once we became adults, it became OUR responsibility to manage our money properly. There are several options to help us out. Banks, Credit Unions, Debit Cards, Electronic Transfers, etc. No matter how you manage your money, it costs these businesses money to help you out. ALL of them charges some sort of fees to cover their expenses. MY experience is that BANKS offer the best services for a nominal charge. I haven't tried many other money management options. What have been some other people's experiences?

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SelfFeb. 13, 11 5:27 AM

To: DanW52 & bottomline The banks make money off of every cent deposited in your account. Do you imagine that there is a pile of currency in the bank vault equal to the value of your deposit account(s) at the bank? No, it is lent at interest; it is invested in bonds, etc. It doesn't sit there in the vault. Further, any interest rate the bank may pay you for your deposit is a mere pittance compared to the value they make with it. These are part of the reason the FDIC exists. Now, to my even more cynical observation: The big banks are becoming distraught at the prospect of losing the small depositors. What they fear is that it means the middle size (pseudo)bankers will be the ones to gouge the small (former)depositors with check cashing fees, etc. Heaven forfend that anyone gets that money but them.

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sellisFeb. 13, 11 6:04 AM

I'm obviously more out of the loop than I thought - I had the idea that many - most? - people were paid by direct deposit and therefore had no choice but have a bank account. Why haven't we gone to electronic transfers and debit cards? - in my experience they are much simpler and cheaper for the bank and the consumer. This is the 21st century and if an old fossil like me can embrace modern online banking then anyone can.

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j193178Feb. 13, 11 7:15 AM

The big five banks are arrogant enough to think that they are entitled one way or another to their earnings; nothing is going to change for them even though many things have changed for you such as job loss,or being rehired for double digit less money. Vote with your feet that's what your immigrant forebearers did when things got bad enough.

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porkerFeb. 13, 11 7:37 AM

Haven't used a bank in over 30 years, but I do have two credit union accounts, where checking is still free and customers are still valued.

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jillgolfFeb. 13, 11 8:06 AM

The banks had it great but they screwed over so many cusomers with the practice of putting the biggest check first- which caused multiple overdraft fees. The people finally got sick of getting screwed with no recourse so ofcourse they went to thier legislator for help. They also gouged with atm fees that were just plain old too high to retailors and users. The banks have brought this on themselves. The real crime here is that society almost forces us to use banks.

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karendavid816Feb. 13, 11 8:09 AM

If millions of people object to new checking fees, wouldn't it make sense that some bank wishing to have millions of new customers would compete for them by offering or continuing free checking? If none respond to this new market it would seem like some price fixing conspiracy. Maybe they really want to just get rid of dead beats who maintain a balance of about $12 and write checks for every purchase at Burger King.

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