OnDemand WTP Pricing Research

A New Bill Banning Banks From Charging Overdraft Fees May Have Unintended Consequences | InsideSources

But Borné believes the bill will force the market to adapt and be more fair to consumers. It may prompt banks to nix free checking account options, but banks would at least be more transparent about the fees they charge.

“What you see is a lot of banks that offer free checking with no upfront monthly fees, but get all their revenue from checking accounts on overdraft fees,”Borné said. “So if you had reasonable regulation, you’d start to see a shift in the pricing model of checking accounts, and maybe most banks would charge a monthly fee for checking accounts and get their revenue that way rather than through these backend ways. Without regulation of overdraft fees, it’s impossible for there to be a shift in the market, because no bank wants to be the one bank to say, ‘We charge $10 a month for checking accounts.’”

Even though the bill may not pass the House due to its lack of bipartisan sponsorship, Borné believes such legislation is necessary not only to improve transparency and accountability in the banking industry, but also to encourage consumers to invest with good banks.

“It seems like over the last several years distrust of banks has been so high with the financial crisis and the Wells Fargo scandal,” Borné said. “Overdrafts are another area that makes it really difficult for customers to trust their banks, and it really is a shame. I think reform in this area would go such a long way to restore America’s trust in their banks.”

Read complete article here:

A New Bill Banning Banks From Charging Overdraft Fees May Have Unintended Consequences – InsideSources.

Post a Comment

WP-SpamFree by Pole Position Marketing