Banking fees could force millions out of account ownership
Over the past several weeks, Wells Fargo, Bank of America, Chase and Citigroup have all introduced new monthly fees on checking accounts. Now, some consumer advocates worry small banks could soon follow the trend.
J.P. Morgan chief executive officer Jamie Dimon recently predicted these fees could force 5 percent of bank customers out of the lending service. This could leave between 17 million and 23 million Americans without access to a bank account.
Currently, the FDIC estimates 7.7 percent of U.S. households are unbanked, Scripps News reports. However, if the current fee structure continues to increase as planned, this number could escalate.
Due to this change, these Americans could be forced to pursue other costly alternatives to traditional bank accounts, the news source says.
“People need to be careful,” Gail Hillebrand, a senior attorney at the Consumers Union in San Francisco, told Scripps News. “What can seem like a convenient alternative [to a bank account] can really cost you.”
Despite being denounced by a number of consumer groups, prepaid cards have been one of the biggest areas of expansion for the payment industry, as they are now outgrowing every other payment method currently on the market.