Schumer tells banks to be upfront about new fees

The days of free checking may be numbered, Sen. Charles Schumer said Sunday, and he wants to make sure bank customers are aware of possible new fees.

In a letter to Federal Reserve chairman Ben Bernanke, Schumer (D-N.Y.) called on the Fed to make sure customers are given "clear and transparent guidance" about potential new fees and not penalized if they choose to change banks when notified of the changes.

New banking regulations set to take effect Thursday would prevent banks from automatically charging overdraft fees to customers who make charges or withdrawals exceeding their bank balance, fees which have yielded banks billions of dollars in profit, Schumer said.

He said new charges for checking accounts are a way for banks to make up for potential lost revenue stemming from the new rules.

"It looks like the banks are trying the old bait-and-switch," Schumer said. "Customers should not be hit with secret fees to make up for bank losses elsewhere."

Schumer didn't specify exactly how banks should notify customers, but stressed that prominent notices should be "in plain language, not legalese."

He said Wells Fargo will begin charging fees for previously free checking accounts July 1 and that Bank of America also will begin experimenting with new fees this summer.

According to the Wells Fargo website, a formerly free checking account aimed at college students will be subject to a $3 monthly fee if other conditions are not met.

The monthly fees for other accounts will increase by as much as $5 per month, but conditions that keep the accounts free, such as direct deposit or maintaining a particular average balance, appear to be unchanged.