Here are the new Brooklyn basement hats that will be available for sale shortly in my store and other retail outlets. check out the pics.
Check out this interesting info about banks and checking accounts. sign of the times.
Is your bank about to fire you?
New rules that rein in overdraft charges have banks eager to dump unprofitable accounts and tack on new fees, but savvy customers will have plenty of options.
For months, we’ve been hearing about how new restrictions on overdraft fees will lead to “the end of free checking” as banks seek to replace the billions in fees they’re about to lose.
You could be forgiven if you’re left with the impression that every checking account will now come with a $10 to $15 mandatory monthly maintenance fee. That won’t happen.
It’s true that banks are fiddling with their fee structures, and you’ll need to pay attention to the changes, or your wallet could suffer. But you’re going to have a lot of options to avoid the fees.
Banks have begun to reassess their checking accounts because of a Federal Reserve rule that, as of July 1, will require customers’ consent before they’re covered by so-called courtesy overdraft. That’s the kind of overdraft program that allows people to spend more than they have in their accounts and then clocks them $35 or so per transaction for the privilege.
Here’s why courtesy overdraft sucks:
- Banks typically signed up customers for this coverage without telling them, and some banks wouldn’t let you opt out. You had this “courtesy” whether you wanted it or not, and most people didn’t want it.
- A few nefarious institutions even added the amount of this courtesy overdraft to the balances you’d see when you checked in at the ATM, a little trick to encourage you to overspend.
- Moderate- and low-income customers paid the bulk of these fees, and one-quarter of the charges were paid by people over 55.
- Banks raked in $38.5 billion in overdraft fees last year, research company Moebs Services estimated, nearly double the $19.9 billion collected in 2000.
Banks are loath to give up all that sweet, sweet profit. Unless you’re a customer of Bank of America — which decided there was no way to put lipstick on this particular pig and dropped courtesy overdraft altogether — you’ve probably been getting mail, and maybe even personal appeals from tellers, trying to persuade you to sign up for courtesy overdraft so your bank can continue to zing you.
You should, of course, say no. Either live within your checking account’s means or opt for true overdraft protection, which ties your checking account to a savings account, credit card or line of credit and will cost you a heck of a lot less than courtesy overdraft.
Banks actually don’t expect their recruitment drive to go that well, which is why Moebs says the new restrictions will decrease the fee income by $2 billion this year. The loss of that income has banks focusing on the fact that many of the checking accounts they offer aren’t covering their costs.
Currently, about half of all checking accounts are unprofitable, a study by research company Celent found. About 51% of depositors don’t maintain high enough balances or bounce enough checks to make back the $250 to $300 a year their accounts cost to maintain. (The accounts that are most profitable, according to Celent: those with balances of more than $3,000, followed by those with 10 or more overdrafts.)
Celent’s recommendation was that banks chase away unprofitable customers with onerous fees, and no doubt some institutions will go that route. The Federal Deposit Insurance Corp., though, is developing a model for a checking account that low- and moderate-income consumers would want to use and banks would want to offer. The basic elements of the FDIC’s proposed “safe” account currently include:
- Electronic banking with a debit card rather than checks, and e-statements rather than paper versions.
- Low opening and minimum balance requirements.
- A low, transparent and predictable monthly maintenance fee (the FDIC doesn’t want to specify how much that should be, although a fee of $3 or less would likely be in the right ballpark).
- The protections of FDIC insurance and consumer laws and regulations.
Such all-electronic accounts “can be reliable for consumers and sustainable for financial institutions, even with low fees and low balance requirements,” FDIC Chairwoman Sheila Bair said.
These accounts could be a vital resource for the quarter of U.S. households that don’t have bank accounts, including many that were once “banked” but were driven away by all the fees.
The FDIC’s research, like its pilot program on small-dollar loans as an alternative to payday lenders, shows that it is in fact possible to profitably provide services to low-income customers without charging unconscionable fees. So let’s have no more of this nonsense that banks “have” to charge checking account fees now that bounce fees are harder to come by.