A year after the Credit Card Accountability, Responsibility and Disclosure Act of 2009, which limited debit and credit card fees charged to consumers, Bank of America, Discover Financial and JP Morgan Chase are using new tactics to boost income, a new report says.
Some are turning to raising premiums on customer accounts and increasing late penalties, while other companies are reportedly charging customers for new coverages without permission.
Banks are reviving annual fees, shortening bill cycles and putting new fees on account exchanges, Dow Jones Newswires reports. JP Morgan Chase announced this week it is phasing out debit cards, ceasing to offer the service for new customers.
“In this environment fee income is ever more important,” Gail Hillebrand, a senior attorney with Consumers Union, told the news source.
The recent legislation has cut into bank profits, which experts predict could result in the industry losing more than $11 billion in fees in 2011.
On October 19, the Federal Reserve announced proposals that could reduce the growing activation fees and interest rates. However, detailed plans on how fee reduction will be enforced have not been released.