The Dodd-Frank bill has been referred to as the "death of free checking" -- in other words, as banks try to recover lost debit card interchange fee income (due to the Durbin Amendment to the Dodd-Frank bill) as well as lost credit card fee income due to the restrictions imposed by the CARD Act, they're going to be forced to charge fees for checking accounts that were formerly "free," but really paid for by charges such as overdraft fees. But as financial institutions such as Bank of America experiment with checking account fees, a survey conducted by BAI suggests these such fees will not go over well with customers.
According to the Wall Street Journal, Bank of America will soon begin testing fees of roughly $6 a month on its most basic accounts. Customers will have no options to waive that monthly fee, the article states. The New Jersey Star-Ledger reports that J.P. Morgan Chase and Wells Fargo will begin phasing out free checking in New Jersey next month, but allow customers to avoid monthly maintenance fees if they meet minimum balance requirements for the account or set up direct deposit.
But the BAI & Finacle Index of Bank Sentiment, a survey of 2,500 bank customers that was released today, found that 85% of consumers surveyed do not expect to pay fees for a checking account. This was a rise of one percent over the February 2010 index. And while 44% of respondents state that fees charged by banks are reasonable, 42% remain neutral about the fairness of fees. That sentiment remains virtually unchanged since August 2009. And overall bank customers seem to be becoming more aware of bank fees: 52% of consumers say they are very knowledgeable about fees charged by their bank, a rise of five percent over the February 2010 index.
Other findings of the survey reflect interesting trends among bank customers:
--They're not saving enough. Only 45 percent of respondents say they are saving money for the future, which is down 6 percent from the February 2010 index.
--They have mixed feelings about their bank. The index shows nearly two thirds of consumers, 64%, agree their primary bank has a good image and reputation. Sixty-two percent say they trust their primary bank; however, 40 percent of respondents said they don't feel their bank looks out for their interests, which is an area that banks continue to focus on improving.
--They still don't trust the financial industry as a whole. About 37% of respondents indicate they see banks as trustworthy, this is up from 33% percent six months ago but remains a low number.
--They appreciate innovation. Among respondents who agree their primary bank is innovative, 92% say their bank offered high-quality online or Web-based banking and payment services. Only 55% of respondents feel this way if they indicated their bank is not innovative. And 93% of respondents who say their bank is innovative also say it is a bank they trust. Only 41% of respondents say they trust their bank if they see the bank as not being innovative.
--They're trying to reduce their debt. 55% of respondents to the most-recent index say they intend to pay off some or all of their credit cards. But this is not really new: 56% and 50%, respectively, felt this way in the two prior surveys.