Under cover of the mammoth Big Whale losses at JP Morgan Chase, several of the nation's largest banks are making basic checking accounts less and less palatable for low-wealth households.
or to increase their overdraft fees.
Beginning this week, a SunTrust customer will have to keep $1,500 in their checking account to avoid a $7 fee. Alternatively, they can set up a monthly direct deposit of at least $100.
The new rules cover basic checking: "Everyday Checking," "Student Checking," and "Solid Choice." The latter is not too steep, but for any account holder paid in cash or without regular employment, this will be virtually impossible to ignore. In fact, this may signal the end of any student-friendly checking as few students will be able to meet either criteria.
All three banks are raising their overdraft fees. SunTrust is going to raise overdraft fees 44 percent - from $25 to $36. US Bank and Fifth Third have situational overdraft policies. With Fifth Third, each additional overdraft comes with a progressively higher fee. At US Bank, overdraft fees are higher or lower depending upon the size of the overage. Both banks are raising fees for certain types of overdrafts.
There is a new term out there for people that leave banks: the "debanked." Having fled, they generally end up going to check cashers or else using a prepaid debit card. In my opinion, the latter option is far more preferable but with that it is worth recognizing that even some prepaid cards come with overdraft fees.