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Media Traditional free checking is ending
NEW YORK and CHICAGO (10/21/10)--Free checking is on the demise in big banks, with at least one source suggesting that smaller Main Street banks and credit unions can prepare for the opening to attract more member/customers. “The days when you could walk into a bank branch and open an account with no charges and no strings attached appear to be over,” reported the Associated Press in a widely disseminated story, “Say Goodbye to traditional free checking” (via “Yahoo! News” Oct. 19). The article noted that Bank of America is charging $8.95 a month for banking with a teller and receiving a paper statement. Twelve percent of BofA’s revenues is made through fees. Tuesday the bank announced a major shift in how it addresses consumer business. Free checking will be nearly unheard of, largely because of the number of regulations hitting banks’ bottom lines, including new laws on high-risk trades, are squeezing banks’ bottom lines, the article said. Free checking rose steadily in recent years before dropping this year, according to Moebs Services, a Chicago-based economic research firm. Last year 81.5% of banking customers had free checking. That dropped to 72.5% this year. Moebs Services founder Michael Moebs said it is now up to smaller Main Street banks to use the opening and grab customers from big banks. Free checking could become a mainstay of community banks and credit unions in the future, he said. To read the full article, use the link.
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