Will Your Free Checking Account Go Bye-​​​​Bye?

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Your free checking account might become a thing of the past. In the unfailing wisdom of Congress, another bill is gaining steam on Capitol Hill under the guise of “consumer protection” which will not benefit consumers in general but only those who exhibit bad behavior.

You always thought banks gave you a free checking account because you are a good person whom the banks care for. Well, they do want your business, and the good ones work hard to serve you well giving you the incentive to remain a loyal customer. But then you messed up one time on your checking account balance and you paid a big overdraft charge. You became angry at first, and then you realized you were the one who screwed up. But then you became angry again because your spouse saw the charge. Then you called the bank in a huff all hot and bothered by this “outrageous” fee. What you didn’t take into account is that you made a bargain with the bank: Keep your account balanced and set up direct deposit on your payroll, and, in return, the bank will not charge you any fees on your checking. The fees are covered by those who do not keep their account properly balanced.

Why would anyone consider this unreasonable? If you screw up, you should pay a penalty. It’s a basic need for all human beings to work through the ups and downs in life which we create for ourselves.  If we make a mistake, the consequences hurt not only to burn in our minds the reason why we must discipline ourselves but also to make us know that we will have consequences again if we don’t take on that discipline.  And it is fully reasonable for banks to provide the overdraft fees they charge in exchange for a free checking account we all enjoy.  And, in fact, it’s the best arrangement because only the most irresponsible pay a consequence while responsible consumers reap a wonderful benefit.

But Congress is about to take your free checking account away from you (not on purpose they will say) because they deem it a progressive policy to protect you from those fees. Oh, Washington will have a fit when banks begin to modify or eliminate free checking accounts. They will scream and yell about the excessive profit motive and the arrogance of Wall Street. And then look for another bill which will tell the banks why they must restore free checking accounts for the poor and those in the inner cities who can’t afford checking fees.

If this all sounds familiar, it’s the same Congressional logic which brought about sub-​​prime mortgages and low document requirements that led to the current financial crisis when all the bad mortgage loans went belly-​​up. All thanks to the Community Reinvestment Act and Congress’ great wisdom in standing up for the consumer.

Caveat Emptor!

This article originally appeared at www.opinontimes.com and is automatically syndicated here with permission.

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