Soaring bank fees after new federal regulations

Ozarks customers could pay more

October 03, 2011|by Sara Forhetz, KY3 News

SPRINGFIELD, Mo.-- Bank of America has taken the spot light announcing a new 5-dollar monthly fee for using your debit card.

The reason, the bank says, is to pay for new government regulations that will cut bank profits from debit cards in half.

Right now, only big national banks will be affected by the new rules.
But smaller banks around our area, even credit unions, worry regulations for them could also be on the way before long.

It's a relatively new convenience that's easy to do, just swiping your card.
It can also be easy to forget that banks are for-profit institutions, out to make money just like you, and the store you're shopping in.

"Banks are being forced to look for ways to find income, but we are balancing that with being fair to the consumer and providing them a good service for the fees they provide," said Shelly Titus with Empire Bank.

Right now the newest government regulations only apply to banks with assets of 10 billion dollars or more. But it has smaller banks watching closely.

"We have to find ways to make money in light of the regulations, but we don't have plans to charge for our debit card services at all," said Andrew Tasset with Empire Bank. He suspects that is probably true for many local and regional banks, and most are hoping to stay exempt from the new laws. Many local credit unions are hoping for the same.

"We're not supposed to be affected, but we are all skeptical," said Judy Hadsell.

Hadsall is president and CEO of CU Community Credit Union. She's hoping the feds' move will mean more customers turning to credit unions. The latest law already has her changing the way she does business.

"For us we are taking a different approach, we're going to do the opposite, we're not going to do a fee, we're going to encourage spending habits that they don't usually do. So instead of paying with cash, pay with a debit card, whether you paid with check, or you paid bills, pay with debit because we'll give you one-percent and hopefully our interchange income will go up," Hadsall said.

"The government has the intent in my opinion to try and positively impact the consumer by saving them money, but all that it is doing right now that we can see is impacting the banks and it has yet to be seen whether the retailers will really pass those savings onto the consumer or not," Titus said.

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