The recently passed financial reform bill will rein in some corporate excess, but don't breathe too easy. Companies will likely find other ways to make up for what they've lost.
For banks, overdraft fees and debit card interchange fees will no longer be the cash cows they once were. Retailers have been forking over an estimated $20 billion to banks each year, just for debit card interchange fees. Overdraft fees are estimated to have plunked $24 billion annually into bank coffers. A recent Sandler O'Neill + Partners report estimated that Bank of America
Out with the old, in with the new
Thus, we can expect banks to come up with new ways to charge us for things. Bank of America is trying out one gambit in Georgia, charging an $8.95 monthly fee for one kind of account if accountholders don't agree to receive electronic statements via email, instead of traditional paper statements. The fee also gets imposed if you visit a bank teller for any purpose that an ATM could manage. Yes, that seems nice and environmentally friendly, but it adds up to $107 per year for customers who can't or won't accommodate digital data or automated service, or who simply don't notice the charge.
Can't charge more in fees? Hike up your rates instead! Capital One Financial
Banks are also looking to encourage more spending on credit cards. Deals have been struck with airlines; for example, Delta
Help or hurt?
To some degree, whether these changes help or hurt us as consumers is up to us. But as investors, banks' continued creativity should serve us well. As the financial crisis recedes, some of them are starting to look like attractive investments again.
Big-name technology companies could be offering us the opportunity of a decade.
