The Financial Column — The Demise of Free Checking

2009-08-23

Three steps every bank needs to take to keep the checking business profitable

Hank Israel, a Director at Novantas LLC, spoke on the syndicated radio program, “The CEO Show” with host Robert Reiss about the new economics affecting the current status of checking accounts for consumers and the banks that manage them.

Israel explained that banks are faced with the challenge of transitioning away from free checking, forcing customers to pay for an assumed cost-free service; “The reality is, that the banks will likely not have a choice. Depending on the final form of regulation, banks will lose between 8 and 16 billion dollars of fees. Key regulation expected later this year will determine whether that loss will happen all at once — or over time.”

Israel provides a list of what banks should to do to keep the checking business profitable.

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