When will free checking really die?

August 18, 2010 | By Jim Kim

People have been talking for at least a year about the end of free checking. And there are indeed more banks imposing checking fees or making it more difficult to qualify for "free" checking. Giants like Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC) have moved in this direction.

Yet about 44 percent of consumer checking accounts were "no strings attached" free accounts as of July, virtually unchanged from six months earlier, according to a semi-annual study by the New York State Banking Department, as noted by Reuters. One expert tells the new service: "To date it's amazing how prevalent free checking remains."

All of that said, some still maintain that the end is near, as the pressure to recover revenue from overdraft fees mounts. Recall the recent ruling requiring Wells Fargo to pay $203 million in restitution to settle charges the bank manipulated transactions to maximize the overdraft fees it charged.

This is the old issue that revolves around the practice of processing checks and debit transactions in order from largest to smallest. Some think this is another nail in the coffin for free-checking. But it will take a long time for the practice to die.

For more:
- here's the Reuters article