Banks are backing off harsh overdraft fees and policies. That’s the good news. The bad news is they will probably look to make up that lost profit elsewhere.
“Banks are going to have to get creative. Rather than generic free checking accounts, you’re going to see lots of different flavors of products,’’ said Bob Meara, a senior analyst with Celent, a Boston consulting firm for the banking industry.
That might mean the return of monthly fees or minimum balances for checking accounts or the bundling of accounts with other services for a fee.
Customers could also be steered toward lower-cost services such as online banking, Meara said. Use of debit cards, which bring banks revenue from store interchange fees, may be encouraged. And networks of bank branches across the country could shrink.
Such changes could help offset the steep losses banks face as they overhaul their overdraft programs, which have come under scrutiny. Critics say automatic enrollment in overdraft programs, which has …
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