Recent reports suggest that it's possible banks are already devising a new way to charge customers. The Financial Times cites executives at two of America's top five banks as saying they will consider charging for deposits if interest rates remain at low levels. The Federal Reserve dropped interest rates down to near zero after the financial collapse of 2008 and has kept rates down near that level since then. The Fed has said it will not raise interest rates again until the unemployment rate drops to 6.5%. Last month it was at 7.3%. Nevertheless, the idea some of these bank executives are kicking around would be to make up some of the revenue lost from earning less interest on their money by passing along the costs to depositors.
John Heasley, Executive Vice President of the Texas Bankers Association, is highly dubious of the idea of charging for deposits. "That really hasn't happened before in this country, and I don't think it's going to have much of an effect because consumers have so many options," he tells KTRH. "We have over 600 banks in Texas with FDIC insurance, and I cannot think of any off the top of my head that would end up charging somebody for the privilege of taking deposits." Even if banks wanted to charge for deposits, Heasley isn't sure exactly how they would do it. "It might be a certain percentage of deposits, like less than one percent, it could be a certain number of basis points, it might be a fee...right now it's just speculation," he says.
The report did not say which banks the executives mentioned were with, but none of the top five banks appears to be hurting for revenue right now. The five largest U.S. banks--Goldman Sachs, Morgan Stanley, JPMorgan, Citigroup, and Bank of America--all reported net revenues during the first nine months of 2013. Beyond that, any move as radical as charging for deposits is likely to cost them customers, which could mean a greater decline in revenue. "I have a hard time seeing how (deposit charges) are going to happen," says Heasley. "Especially in a competitive marketplace, and especially in Texas, where in most cases banks are seeking more deposits."