Federal mandates and financial reforms are making it tougher for banks and credit unions to turn a profit, and many are increasing fees to make up the difference.
Some banks are increasing ATM fees, others are getting rid of reward programs for customers, and for many what once was free now has a price tag.
“You’re beginning to see the little telltale signs of what might happen, and that’s the end of free checking,? ISU Credit Union President and CEO Robert Taylor said.
New federal regulations cap debit card swipe fees at 21 cents, taking a big cut out of banking profits.
“Whenever you get the government involved in price setting there’s always unintended consequences, and this is really not going to save people money. It’s going to push the consequence into the consumer area,? Taylor said.
Like many other banks, Wells Fargo is getting rid of debit card rewards and putting in place some new fees.
“Another change is that we are also introducing a monthly service fee to our Wells Fargo free checking and Wells Fargo essential checking accounts customers,? Wells Fargo Idaho Region spokeswoman Amy McDevitt said.
But these new regulations give a break to local banks and credit unions.
If they’re worth less than $10 billion, many of these changes aren’t supposed to apply.
“Our checking accounts and debit cards have been free for a long time and we hope that we can continue that tradition and that tomorrow they stay that way,? Pocatello Railroad Credit Union Vice President of Member Solutions John Cole said.
But other financial institutions said higher fees could be in the future for local banks and credit unions.
“ISU Credit Union intends on not charging these type of fees for as long as possible, but, ultimately, I think market forces will cause all financial institutions to have to make up for the lost income,? Taylor said.
For those who are seeing fee increases, a call to the bank may help find a way to avoid new charges.
“There are many ways to structure your account so you don’t have to pay fees. So that’s why we’d encourage people to see a banker,? McDevitt said.
Starting Oct. 1, the new cap on card swipe fees will go into effect.