The average consumer pays 26 percent more in fees associated with basic checking fees than ten years ago, as many banks have used fees to make up for revenue loss due to regulation, according to a new study released by Javelin Strategy & Research.
Javelin's "The Cost of Regulation: The Necessity of Bank Fees" report also found that bank customers pay 53 percent more for returns of deposited items than they would have in 2002. Javelin's analysis of three checking account scenarios reveals that the most common direct deposit account bank fee components -- monthly account fees, in-network ATM fees, and out-of-network ATM fees -- increased more than 20 percent over the past five years.
Large banks typically charge higher fees for basic checking, while midsized banks charge less than two-thirds of the rate charged by the top ten banks, the report found.
While financial institutions are charging higher bank fees to recoup lost revenue due to Durbin and other regulations, Javelin noted they are also offering value-added and technology-based services such as expedited payments, alerts and mobile banking to meet consumers' needs for convenience and flexibility.
Javelin's bank fees report identified transparency as a key strategy for banks to communicate with consumers about the fee structures as a way to empower -- and retain -- their most profitable customers.
"It's important that banks be clear, transparent and detailed when communicating with customers about fee-based services," said Beth Robertson, director of payments research at Javelin. "Consumers can then select those banking products and services that best meet their particular needs."