Why Eastern Iowans Might Soon See More Fees and Fewer Perks at the Bank

LINN COUNTY - Fees, fees and less for free.

A new study released by Bankrate.com on Tuesday showed a dramatic drop nationally in free checking accounts.

According to the study, this year, only 45% of non-interest checking accounts came free of charge, and the average monthly fee for non-interest checking accounts jumped to about $4.37, a 75% increase.

Eastern Iowans, like Cedar Rapids resident Sally Koenigs, say they're noticing a difference in free services offered at their banks.

"My kids savings account we're going to have some fees for,” said Koenigs,  “So now they only have one, because I'm not dealing with that."

Locally owned Marion bank, Ohnward, still offers free checking, but Market President, Gary Bartlett, says the drop in free services at many other banks is not surprising.

“As we have to comply with regulations, you have to recover those costs somewhere,” Bartlett explained.

Banks received new federal regulations with the Dodd-Frank Bill passed last year that completely overhauled the financial industry.  Now, on October 1

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, an amendment to that bill goes into effect.  It requires large banks that generate more than 10 billion dollars to charge retailers no more than 21 cents for a swipe for credit cards and 24 cents for debit.

While Ohnward doesn't fall in this category as a small bank, Bartlett believes all banks will ultimately be effected by the change.

"Price fixing mandated by the government we don't believe is helping our customers, and it's hurting us in a very direct way,” he said.

Supporters of a capped swipe fee say it cuts costs for retailers and might save you money the next time you shop, but Bartlett says whatever you save in the check-out line you'll likely pay back in banking fees.

"There will be fewer free checking, interest rates will go up. It's either going to come from income or expense side but probably both none of us are immune.”

Bankrate.com report also showed banks offering free checking but under certain conditions.  Customers may need to do direct deposit or have minimum amount of money in the account at all times, but that minimum amount also went up this year.