According to the 2010 Checking Study by Bankrate, Inc., the percentage of free checking accounts is decreasing. The study, based on surveying the top ten banks in 25 of the nation’s largest markets, found that between 2009 and 2010 the percentage of checking accounts considered “free” decreased from 76% to 65%.
Bankrate cites two regulatory changes as contributing to the decline. First, debit overdraft fees were a significant bank revenue source ($37.1 billion in 2009) and a new Federal Reserve rule is requiring that banks obtain consumer permission before enrolling them in overdraft protection. Second, the Dodd-Frank Wall Street Reform and Consumer Protection Act allows the Federal Reserve to regulate the merchant fees paid to banks for debit card transactions. Bankrate explains that these fees helped subsidize banks’ costs for providing free checking to consumers. The study also found that the average bounced-check, ATM, and account service fee rose; the average yield on interest-bearing accounts declined; and the average minimum balance needed to open an account also declined.
