March, 10, 2010

The $38 billion in overdraft-protection fees that make up one of the banking industry's fattest cash cows will take a significant hit this summer when federal rules kick in that preclude the practice without prior consumer approval.That means financial institutions — battle weary from last year's economic crisis and new credit-card rules that slashed their ability to make money — are looking for new ways to make up the shortfall.

And consumers ultimately will be the ones to take the hit, industry watchdogs say."Clearly . . . there will be an effort to recoup it . . . and it's to be the customer who pays," said John Ulzheimer, president of consumer education at which tracks the banking industry.One of the first areas to get dinged, Ulzheimer said, will be the long-popular free checking plan, a 1990s concept that proved so popular it morphed into a given.We will see a higher standard in order to earn free checking accounts," Ulzheimer said. "It used to be that you'd get it with direct deposit, but that will change."

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