Big checking account fee hikes at some big banks
Some of the biggest banks in the country are jacking up their checking account fees.
The monthly fee on Bank of America's most popular checking account is up 25 percent, to $12, from $8.95, reports CBS News correspondent Jim Axelrod. And starting next month, B of A customers will get charged a $35 fee if they overdraw their accounts - even by just a penny.
The fee on a basic checking account at Chase is $12, twice what it was.
What's behind the hikes?
Experts point to regulations going into effect this summer limiting how much banks can charge merchants for debit card transactions. They say banks are simply looking to raise that revenue elsewhere.
The banking industry estimates regulations will cost banks somewhere between $14- and $15 billion.
"If you owned a burger joint," explains Bankrate.com financial analyst Greg McBride Sr., "and somebody told you you could not charge any more than a given amount for a hamburger, you'd just raise the price on soda and fries. And that's what we're seeing in the banking arena."
American Bankers Association Vice President and Senior Counsel Nessa Feddis tells CBS News, "If the government comes in and reduces some of the revenue, the business has two choices: reduce expenses or increase prices, and that's partly what we are seeing here."
In essence, Axelrod points out, bankers are trying to deflect blame from themselves to the government.
"Accounts cannot be provided for free," Feddis says. "There is a cost to providing online services, bill pay, debit cards, ATMs. The income has to come from someplace. The government has eliminated one of those places, understanding that they will be looking to their customers to pay bank fees."
But Bankrate's McBride says consumers seeking free checking still have some options, observing that it's "not going to go away completely. Smaller community banks, credit unions, and online banks remain fertile ground to find that free checking account."
At least, Axelrod notes, as things stand now.