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Calling at the end of an era the era of free checking but my next -- says nonsense free checking is alive and well.
Greg McBride is the senior financial analyst for Bankrate dot com Greg -- great to see you.
Thank you Gerri good afternoon.
All right so.
You know we've been covering this ad nauseam Bank of America if she days wells -- golf throwing away -- free checking.
We take consumers are not happy getting those notes in the mail saying it's gonna be ten dollars it's going to be thirteen -- and they're just testing it now.
But it's clearly in a roll it out everywhere.
Do you expect all banks to do this.
Now not at all I think -- the sea change here is that while free checking was of the virtual commodity in recent years I mean everybody in town offered it.
It's on the decline that the particular with a large banks that were the last to jump on the free checking bandwagon they're the first to jump off.
But smaller community banks credit unions and online banks are still going to be fertile ground for free checking into an even -- it it'll be decreased relative to the prevalence of the past few years.
But it's not gonna go the way the -- well.
Increasingly at Bankrate dot dot com -- big study on credit unions have found that 39 a fifty.
Are keeping that free checking in place.
What other things -- -- unions doing for us.
Yeah that's true credit union -- among the largest credit union's 76%.
Currently offer a free checking account that's down just a tad from a year ago.
But on top of that an additional 20%.
What waive the fees if you sign up for direct deposit and or electronic statements so put those two together.
You get 96%.
Of the largest credit unions that either offer free account or one they can become free with pretty minimal effort.
Think it's good evidence that free checking is still within the grasp of most Americans.
The Rangers won the 10% which is pretty much lower than what the banks are even talking about at this point so that's pretty interest saying.
You know when I talk to people about the option of cranes they're like.
Why I don't know them I couldn't possibly do that -- I think there's a fear factor frankly because they don't have their logo on on every corner.
Should people be afraid of credit unions why are they say.
I -- not at all in fact I think there's certainly an awareness issue the field of membership.
For eligibility it has been expanded in recent years with a lot of people.
They could be eligible for -- membership and a credit union but not even realize it.
And in these times when every dollar counts.
It's a viable alternative for people that are looking to get not only the best bang for the buck higher rates on deposits lower rates on loans but to avoid those ever increasing fees.
A lot of people are saying that Dodd-Frank.
Lot of people banks are saying got different is what's making their fees go up.
Also the card act our credit unions do they on have to play in those and those that arena survey -- exempt from.
And then -- -- credit unions are confronting many of those same obstacles and you know we see some commonalities between banks and credit unions in the sense that.
That's compared to a year ago bounced check fees they were higher credit unions as well ATM surcharges were also higher credit unions.
Just like what we're seeing -- -- so.
They're confronted some of the same regulatory obstacles big difference -- the credit unions is that they're not for profit they return whatever profits they make.
To their members in the form of.
Better rates lower fees and more products and services aren't as you look forward I know that you rank banks.
You very closely watch what they do -- do you expect these -- eventually to turn around because of competition is this just for example a reaction to.
The regulatory climate to what's been going on with the economy the banks have been so.
So so it you know excited about raising fees for consumers will that turn around and went.
You know I think it's certainly.
It's an opportunity from a competitive standpoint -- -- there are 7500.
Banks in this country.
An equal number of credit unions there are plenty of fish in the sea.
And I mentioned earlier about the bandwagon you know -- larger banks over the last to jump on the free checking bandwagon of the first to jump off.
There are plenty of other institutions smaller community banks the credit unions the online banks that.
It's really -- -- model that they're gonna offer the lo -- alternative to free accounts that the better rates and they're gonna stick to that that's really going to be their competitive advantage that's the way.
That they're gonna beat the bigger banks of their game no toasters anymore -- noticed that.
Grandmother -- cash effect back up thank you -- -- right thanks for stopping by.
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