Starting next month, new rules will bring the overdraft fee (overdraft news) era to an end; banks will no longer be able to automatically charge such fees.

The industry responded well ahead of the July 1 start date. By one estimate (Moebs Services), nearly 14 percent of bank and credit unions have eliminated their overdraft programs altogether. Bank of America (NYSE: BAC) ended its program in March.

The industry will lose $2 billion in 2010 to $35.2 billion as a result. Obviously, banks will need to make up that revenue. Many are talking about the end of free checking. That is indeed a good way for the industry to warn that more fees are coming.

But in the end, most banks will likely be more savvy than just saying, "from now on you pay a maintenance fee." I think the marketing folks are cleverer than that. If you start charging a fee, you'd better offer some sort of additional service. There is still strong demand for overdraft services, so perhaps tailored offerings will arise--overdraft protections only on certain items.

The inevitable fee creep will likely be covered aggressively by the personal financial press. We're seeing warnings of more fees already. So it pays to be creative about this situation.

For more:
- here's the article

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