Bank Fees Push Consumers to Put Money Elsewhere

Occupy Santa Cruz - Bank of America refusing to close account

Alternative finance firms, from credit unions to online and pawn lenders, are gaining traction as banks turn off the tap for easy cash and start charging fees for services that customers have had for free.

Some 60 million Americans — close to a fifth of the adult population — were underbanked or unbanked in 2009, according to the Federal Deposit Insurance Corp. That number is likely to rise as banks choke off free checking, and adjust to new rules that cut into their revenue.

Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo, PNC Financial, Suntrust and others are beginning to charge for once-free services, making a bank account more of a luxury to those living on a tight budget.

"Credit unions are an alternative source for the kind of services a bank provides," said professor Lawrence White of New York's Stern School of Business. "I'm hoping they would see the unbanked as part of their mission. That would be the most socially worthwhile thing they could do." More...