With the new laws, it’s not as easy for banks to squeeze their credit card customers… so they’re exploring more fertile territory.
While it can’t be quite as profitable, NYP says banks are looking for more ways to take money from their debit card customers.
Earlier this month, Bank of America announced a $35 fee for most debit-card overdrafts — plus a second $35 fee if it isn’t repaid in five days.
In March, PNC Bank hiked its sustained overdraft fee by 16 per cent to $7 a day.
The moves by BofA and PNC follow inflated international fees set by Citigroup and a new, 2 per cent foreign fee imposed by Discover Cards.
Presumably, the fairness of said fees is something that the new consumer protection regulator will be all over like white on rice. Much will come down to the old (old) question of whether charges like overdraft fees constitute a legitimate fee, or whether they’re a loan, in which case they represent an interest rate that would make any userer blush.
That being said, it would probably be better for financial stability if banks derived more of their income from various fees and services, as opposed to lending. Perhaps it’s a price worth paying.
Update: WaPo covers the same story in today’s edition of the paper.