Financial Reform causes Decline in Free Checking

Thanks to Congresswoman Betty Sutton (OH-13) & Congressman Dennis Kucinich (OH -10) supporting the over-reaching and restrictive financial reform bill it looks as if Free Checking at your local bank may go the way of the free toasters banks used to give away.

From National Association of Federal Credit Unions --

Aug. 27, 2010 – A new study indicates that the number of U.S. banks and credit unions that offer free checking declined by 11 percent from one year ago, with the new Wall Street reform law cited as one reason.

Moebs Services, an economic research firm in Lake Bluff, Ill., reported Wednesday that 72.5 percent of the institutions it surveyed offer free checking accounts to consumers compared with 83.5 percent from last year. The company said that the data reflect the realities of the economic downturn, the shift away from free checking among Wall Street banks and concerns about new regulations under the Wall Street reform law.

Of the three types of financial institutions surveyed – Wall Street banks, community banks and credit unions, Moebs Services found that credit unions rank first among institutions that offer free checking: 73.4 percent of credit unions indicated that they offer it (down from 89.3 percent in 2009). That compares with just 63.6 percent of Wall Street banks (down from 92.6 percent in 2009) and 71.7 percent of community banks (down from 78.3 percent.)

In announcing the data, Mike Moebs, economist and CEO of Moebs Services, said that free checking offers have generally risen over the past 10 years, with just an occasional drop. “We saw a slight fall in 2002 and again right before the mortgage bubble burst in 2006,” Moebs noted. “Some depositories have stopped offering free checking as a way to reduce costs in light of overdraft and financial regulatory reforms. Others face low earnings and a shortage of capital, so lower expense and higher revenue are needed to rebuild their capital position, especially at Main Street
institutions.”