Why Are Banks Raising Fees?

(CBS)  With mortgage defaults and unemployment still on the rise, the big banks are still taking a beating on bad consumer loans. Bank of America said today that it's put aside another $13 billion to cover mounting losses. Citigroup $3.9 billion.

To offset those losses banks are hiking fees even on good customers as CBS News Business Correspondent Anthony Mason reports.

"Banks are looking to do much what airlines, state and local governments are doing. And that is fill the revenue gap by boosting fee income," said Greg McBride of Bankrate.com

Mary Gorman found that out after she her 48-year-old son died. When she went to close his checking account, Bank of America hit her with a $100 fee.

"I just didn't realize they would charge to close an account. They're taking money from a dead person," said Gorman.

Bank of America later refunded the money. But in June, it raised the fee on its basic monthly checking account from $5.95 to $8.95.

Among big banks, the average ATM charge is now nearly two dollars - up from $1.78 just a year ago. The median overdraft charge, which 6 years ago was $20, has jumped to $26 this year. The first time it's increased during a recession.

Heather Dunado got hit by those higher fees, when a loan was late being transferred into her account.

"So not only was the money for the bills gone. I also had $120 in overdraft fees," she said.

But as job losses mount, many borrowers are falling behind on their payments:

Analyst Paul Miller believes unemployment could be headed for 11 percent, and cause a lot of problems in the banks.

The banks want to raise fees now because new restrictions passed by Congress take effect in February. The fed is also working on new rules on overdraft protection.

[pepperwood2]

Fed Pushes Citi, BofA to Increase Capital......Regulators have told Bank of America Corp. and Citigroup Inc. that the banks may need to raise more capital based on early results of the government's so-called stress tests. And that's the way it is.

[lluba]

What a world..
The banks extended credit where it was not warranted, it turned out bad, and I'm one of the responsible ones that has to pay extraordinary fees..and was responsible

Punch line, they won't give me the miniscule credit I want..

[Illuminated1]

I protest any changes to ATM machines and I protest the charge on your debt card at gas stations as well.
I remember the heyday of banking with real bank tellers inside the bank.
As I see it, all ATM machines did is bring in money to the banks as it was, they claim it was improving services while cutting costs.
Now it seems they are changing their basis.
DEMAND THE BANKS QUIT PLAYING WITH THEIR CUSTOMERS OR FACE LOSING THEM.

[culturechang]

So they can get more revenue and claim a bigger loss to Congress for another bailout. Remember, black is white and up is down in Washington.

[Oregon_State_OSU]

Bank of America is the WORST BANK Ever. They are Slick. I closed all my accounts with them 2 years ago and refuse to do any business with them ever.

[cyberus-2009]

Why are they raising fees?

Because they can

[Slrman-21001573651763300012869]

BoA charges $100 to close an account? That's no surprise from these greedy a$$holes. They are easily the worst place to bank in America. They also treat their employees like criminal slaves, too. I will never allow these jerks to see one penny of my money. Not now, not ever.

[YCantWeAllGetAlong]

I have no credit cards and I use a credit union. I would NEVER pay money to use a checking account, nor would I EVER pay a fee to use money. If I don't have the money for something, I don't buy it. What a novel idea! These companies are raising fees because they can get away with it and they couldn't care less about you, your family or your situation. Trust me, you won't hear a peep from them unless you are a few days late. Then, they will call you night and day and hound you to the ends of the earth. Why do people continuously use these credit cards for pleasure spending? If you don't have the cash, don't buy it.

[harpoot]

Just a wee guess but I'd say they are greedy BA$TARDS.

[brianbwb-2009]

Marcus Garvey warned everybody about the dangers of credit, (being the first step back to slavery) way back when, but did any one listen?

Nah, what did he know, he was just another "n-word".

Abolish the fed, let the government print our currency, with no instant debt attached.