Unfree checking: bank regulation payoff.

• Author: Mangu-Ward, Katherine
• Position: Citings - Brief article

THE VERY notion of monthly fees for checking accounts was until recently another scalp on the belt of technology, like paying for porn or worrying about the length of a long-distance call. But the era of free checking may be coming to an end, thanks to new consumer protection males issued by the Federal Reserve under pressure from Congress and the White House.

More than half of all checking accounts are currently unprofitable, according to a May report by the financial research firm Celent. Overdraft fees minimized the losses on the smallest accounts. But the new rules, which kicked in on July I, prohibit overdraft fees without a customer's explicit consent. So now many banks are instead choosing to spread those costs evenly by charging poorer people monthly fees.

People who have a lot of money in their accounts, use a bank credit card, or employ bank-based investment advisers won't pay the new...