Financial Regulation

Happy Birthday to the Dodd-Frank Rule That Killed Free Checking!


birthday check

One year ago today, the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act went into effect. Designed to protect consumers from high fees on debit card transactions, the new rules inadvertently put an end to free checking as we knew it.

After the new rules kicked in, the banks started looking for ways to make up for the lost revenue, experimenting with $5 monthly changes on low balance checking accounts and other maintenance fees.

In honor of this inauspicious anniversary, John Berlau of the Competitive Enterprise Institute writes:

According to the just-released annual survey of, only 39 percent of banks offer free non-interest checking accounts with no minimum balance, down from 45 percent last year. As the Huffington Post puts it, "If free checking accounts were animals, they'd be on the World Wildlife Fund's list of endangered species."

The results of this legislation (and the Federal Reserve rules it authorized) have made some responsible checking account holders pretty darned unhappy. But that hasn't stopped lawmakers and regulators from looking into putting the same kinds of caps and fee restrictions on credit cards as well. And then that happens, customers on the bottom end of the scale can look forward to bigger annual fees and fewer rewards points or frequent flyer miles. All of which compels us to say one more time: You Can't Call It an Unintended Consequence if You Knew It Was Going to Happen.

NEXT: American Express to Refund $85 Million

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    1. Well maybe they should make some friends in Congress like the banks do.

      1. I don’t think consumers can afford the dues.

        1. Well then they should quit their bitching and start a hedge fund.

  1. That checking account balance, you didn’t build that.

  2. Nobody, not even Dodd and Frank, could have guessed that any lost revenue would be made up at the expense of the customer.

    1. That is just it. For normal people this would be so obvious that it has to be considered to be an intended consequence. But Dodd and Frank are not normal people. No, they really are that stupid. I have no doubt they honestly thought this was going to help out consumers.

    2. Anyone who says that it could have been guessed is just recycling teabagger talking points from the Kochtopus.

  3. Birthday Money isn’t legal tender? Fuck you, Butterscotch!

    1. No, fuck monopoly money.

      As for Butterscotch, I’d hit it.

  4. I regard HsquirrelzR’s refusal to cite the Iron Law correctly as a sign of their envy.

  5. It’s instructive that neither Dodd nor Frank have ever held a job in the private sector, let alone worked in finance.

  6. customers on the bottom end of the scale can look forward to bigger annual fees and fewer rewards points or frequent flyer miles

    But democraps care so deeply about the trevails of the poor. Can’t you just feel the caring?

  7. Big deal, just mandate free checking accounts! Next up, free ATM usuage. I can’t count the number of (seemingly) intelligent people who’ve bitched to me about ATM fees to “get their own money out.”
    My counter is always: “Do you object to paying the valet kid to ‘get
    your own vehicle’ out of the lot?” Surprisingly, several told me that all parking should be free too in all city garages. I swear there are people who would be fine with government taking 100% of their wages if they could get everything they want free.

    1. Doing things and taking care of yourself is just so HAAAARRRDDD!!11!! /lib-tard

  8. Uh, I have free checking.

  9. Odd, I have free checking with no minimum balance . . .

    Oh, when we go down into the article, we find that, in fact, 39% of banks still offer free checking with no minimum balance after the rule. While 55% of banks didn’t offer it before the rule.

    Yes, down six percentage points is a rather large annual shift. But it’s hardly “an end to free checking as we knew it”.

    1. But really, what do you need checks for? Who even wants them? Is there anyone who accepts checks, but doesn’t accept a debit card? Usually it’s the opposite.

      Try writing a check for a drink on an airplane. Or in a foreign country.

  10. I now have a supermarket “rewards” card. You “load” the card in advance at a flat fee of $3. Although the supermarket now offers free reloading coupons. It also gives you discounts on groceries, “points” towards discounts on gasoline, $5 off your grocery bill every couple weeks, and you can pay for anything with it. Your rent, your utility bill, your water bill, order off Amazon, etc. Anything you can pay with a check, you can pay with your card, plus get discounts.

    I’m expecting a law or regulation or SOME damn thing any day now from the government, being pressured by the banks, to outlaw this. Just wait.

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