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‘Predatory’ fees may be history, but don’t cry for the banks

Yahoo Finance
Yahoo Finance

Banks are no longer depending on banking fees to boost their bottom lines. The amount of money banks earned from account fees was $32.5 billion in 2013, down 21% from 2009, according to FDIC data cited by The Wall Street Journal. Banks charge their customers a laundry list of fees, including overdraft fees, minimum balances, online banking and bounced check fees.

Related: Bank lending mounts a comeback

Yahoo Finance’s Aaron Task and Lauren Lyster both agree that consumers have benefited from regulation enacted to end “predatory” lending. The fact that banks are depending less on customer banking fees is a “victory” for the Consumer Financial Protection Bureau notes Task in the video above.

The CFPB was established in 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The government agency focuses its resources on protecting consumers when it comes to mortgages, bank accounts, payday lending, private student loans, debt collection and credit reporting.

The CFPB said in its July report that the majority of debit card overdraft fees were incurred on transactions of $24 or less and the median bank overdraft fee was $34.

Task notes that banks have found new sources of revenue to make up for the lost banking charges. The industry overall posted its second-highest profit total last quarter in 23 years.

Related: 3 keys to getting a mortgage, BEFORE you apply

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