There's bad news on the way for the country's banks -- and that could, in turn, translate to bad news for American banking customers, experts say.
In Congress, lawmakers are considering an amendment limiting "interchange fees" -- the fees banks charge to merchants each time consumers use debit cards at their stores -- while, at the Federal Reserve, officials are preparing to implement new rules next month stopping banks from automatically charging overdraft penalties for ATM and debit card customers without prior consent. For new accounts, the rules will take effect July 1; existing accounts will be subject to the changes Aug. 15.
Combined, the two measures will hurt bank revenues and leave them scrambling to recoup their losses -- and that will likely mean new fees or new restrictions on once-free checking accounts, said Greg McBride, senior financial analyst at Bankrate.com.
"Free checking used to be available to anybody who walked in the door," McBride said. Now, he said, "it's either not going to be available to some banks, or it's going to require jumping over some hurdles."
At least one major bank has already announced increases to its checking account charges: Wells Fargo, the country's fourth-largest bank by assets, will increase monthly service charges by $2 to $5 on July 1, depending on the account, a bank spokeswoman confirmed.
Bank of America, the country's top bank by assets, is "testing new offerings" for its checking account services -- the bank already has monthly maintenance fees on its checking accounts -- that will provide customers with "more choices on how they can pay" for the bank's services, a BofA spokeswoman said.
Both banks stress that customers can get checking account fees waived if they meet certain requirements, such as maintaining certain minimum balances, having their paychecks directly deposited to their accounts or using other bank products.
But McBride warns that some of the steps consumers might need to take to avoid checking account fees will come at a different cost. Maintaining a higher minimum balance in a checking account, for instance, may force a consumer to transfer money out of a higher-yielding savings accounts. Savings accounts generally feature substantially higher interest rates than checking accounts, which often don't offer interest rates at all.
Adding direct deposit to a checking account, meanwhile, may make it more of a hassle for a customer to switch their business to another bank later on.
"The more products and services that the bank has with that customer, the less likely they are to defect to a competitor," McBride said. "Direct deposit is one of those hooks."
Consumers intent on free or low-cost checking accounts will still be able to find them at credit unions and smaller community banks, McBride said.
"Just because your bank is doing away with free checking, it doesn't mean you have to take it sitting down," he said. "Shop around."
Exactly how much do banks stand to lose thanks to proposed and definite regulatory changes? While there's little in the way of estimates on how restricting "interchange fees" would affect banks, losses pegged to overdraft fee changes range from millions to billions of dollars, depending on the bank.