In addition to possibly paying an overdraft protection fee, many bank customers will have to start paying to simply have a checking account.

Bank of America recently converted customers from its eBanking checking account option to a new type of checking account where they will incur a fee of $12 per month.

The eBanking checking account was $8.95 per month unless the account holder refrained from visiting a bank teller and opted for paperless online statements. If the customer met these two conditions, the eBanking checking account was free.

Avoiding the new checking account’s $12 monthly fee has a higher hurdle. A checking account balance of more than $1,500 will need to be maintained or a direct deposit of at least $250 per month will need to be made in order to avoid the $12 recurring monthly charge.

Overdraft Protection Fee Means Big Revenue for Banks

Since the 2008 recession, banks have increasingly looked to account fees as sources of revenue. Many banks have increased the amount of their overdraft protection fee and have designed the terms of their overdraft protection plans to increase the number of fees they can assess.  Typically, consumers with the least income will be paying the most in fees.

The Center for Responsible Lending says that U.S. customers pay nearly $14 billion a year in overdraft protection fees.

Financial institutions have faced lawsuits because of unscrupulous checking account practices. Some banks have been found guilty of posting transactions in a certain order to maximize the number of overdraft protection fees they can charge, which are usually $35 each. Bank of America recently settled a case regarding unauthorized overdraft charges.

Now that financial institutions have been forced to reign in their overdraft fee practices, they have to find a way to make up for that lost income.

All sorts of fees have increased over the years as banks have made less money through interest. Overdraft fees, ATM withdrawal fees, debit card fees, and checking account maintenance fees all help financial institutions profit from the customers they are supposed to serve. For example, an overdraft fee is generally the same cost whether an account is overdrawn by $15 or $200.

Banks and credit unions are facing investigations for administering overdraft fees in a way that could violate the law. These fees tend to be the most harmful to lower-income bank patrons who are the least able to afford them.

Financial institutions are businesses, and businesses need to make money. However, there are laws against these financial institutions imposing fees on consumers who have not opted in to overdraft protection or other fee-based service programs.

According to Pew Charitable Trusts, more than half the bank customers who incurred overdraft fees in 2014 did not remember enrolling in their financial institution’s overdraft protection program. If a bank or credit union charges a customer an overdraft protection fee without having the consumer’s authorization to enroll in such a protection program, the consumer might have a legal claim.

ATTORNEY ADVERTISING

The choice of a lawyer is an important decision and should not be based solely on advertisements.