“If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger … Over time, it will all be repriced into the business.”
In other words, when one charge it outlawed, another will be instituted to take its place—and the customer will pay one way or another, regardless of regulation. From the point of view of a vigilant consumer trying to avoid constantly getting hit with fees, this is like playing Whack-A-Mole, as I’ve said before, with new fees popping up just as you’ve gotten rid of others. For example, because new rules make it more difficult for banks to assess fees for debit card overdrafts (which contributed heavily to $40 billion in bank revenues last year), it is widely speculated that free checking may become a rarity (see the NY Times Bucks blog for a few examples of this happening right now), and charges like Bank of America’s new $9 monthly fee for receiving paper statements may become commonplace.
The restaurant parallel above comes from JPMorgan Chase CEO Jamie Dimon, who made the statement yesterday, after his company reported a $4.8 billion profit for the second quarter, and was quoted in a NY Times story about how banks began adjusting and strategizing to counter the new regulations and consumer protections that became reality with the passage of financial reform by Congress.
What can the consumer do to avoid new fees? Well, if a restaurant jacks up the price of your burger to absurd levels, you’d probably start dining somewhere that’s more reasonable. And just as there are plenty of options for where you can eat—with varying price points, markups, and quality of customer service—there are plenty of options for where you can bank.