New financial regulations take hold in 2011
Checking accounts may become more costly
Don't be surprised if 2011 finds you getting dinged for monthly maintenance and other fees on a checking account that used to be free, says Peter Garuccio, a spokesman for the American Bankers Association in Washington, D.C.
As a result of another financial reform starting July 21, banks will see their revenue from processing debit card transactions cut in half by new limits on debit card interchange fees. That may force banks to begin charging more fees to checking account holders.
"If merchants aren't going to pay for the cost of maintaining the (debit card) system, it's going to fall to consumers," Garuccio says.
High interchange fees masked the true costs of checking accounts and made "free checking" possible, says Michael Barr, a law professor with the University of Michigan Law School and former Assistant Secretary for Financial Institutions at the Treasury.
"Everybody knows free checking isn't actually free; people pay for it. But you pay for it after the fact through hidden fees and overdraft and other measures," says Barr. "What you're going to see is more transparent pricing that allows people to actually make financial decisions that are good for themselves and their families."