Banks cry poor, hike account fees: Are they bluffing?

a clerk at Citibank writes something down
a clerk at Citibank writes something down

A new study says a forthcoming crackdown on certain fees could cost big banks billions, but it's not clear that the impact will be as bad as they claim -- even as they blame these regulations for high checking-account fees they're foisting on customers.

First, some background: Legislation passed in July gives the Federal Reserve the power to set limits on how much an issuing bank can charge a store when a customer uses that bank's debit card to pay for their purchases. Despite the fact that banks like to market debit cards by saying they're the same as cash but better, this comparison doesn't extend to the merchant's point of view.

Retailers pay a lot to take your debit cards: $22.8 billion each year, according to CardHub.com, which conducted a research project to study the issue. CardHub concluded that if the Fed made big banks lower their fees by 20%, they'd collectively lose $3.6 billion, or $7.30 per card, each year. If fees dropped by 35% on the Fed's order, those figures would be $6.4 billion and $12.84, respectively. Finally, if the Fed cracked down in a really big way and slashed current fees by half, banks would lose $9.1 billion annually, or $18.35 per card.