NEW YORK — Free checking accounts may be one step closer to extinction. Starting July 21, regulatory changes are expected to sharply limit the fees that banks can collect from merchants whenever customers pay with debit cards.
An attempt to delay implementing the rule by a year was narrowly defeated this week, meaning banks will be looking in earnest for ways to make up an estimated $14 billion in lost revenue.
Customers have already seen the fallout start to take hold.
Bank of America is testing a new lineup of accounts that come with fees ranging from $6 to $25, depending on the level of service selected. Citi already revamped the terms on its checking accounts last year to include higher fees in many cases. Chase, PNC Bank and Wells Fargo ended or scaled back their debit rewards programs.
And more unwelcome changes are likely in store. Among the possibilities: Fees for debit cards and even a $50 or $100 cap on transactions.
“Banks have two ways they can cope; they can cut costs or they can raise revenue,” says Bart Narter, a banking analyst with the consulting firm Celent. “They’re going to have to charge you for things that they used to give away, like online bill pay.”
