In an ironic twist, banks now find themselves feeling pinched because of the fees associated with the bailout funds they received and they’re asking the government to reconsider those fees. According to the terms of the loans given to banks, they must be repaid with 5% interest, regardless of how long the loans are outstanding. The American Bankers Association sent a letter to the FDIC and the Treasury asking for the 5% interest expense to be lifted for banks repaying the personal loans early.

Bank customers have historically been the ones complaining about fees. Consider the following fees that have become accepted practices in banking:

ATM Fees: The cost of making cash withdrawals from an ATM machine that is not tied your bank can be substantial. Over 99% of banks charge at least some kind of fee for non-bank customers to access cash. The fee is typically $1.50, but ranges to as much as $3 with some banks. Your bank probably charges a fee on top of the fee you paid at the ATM machine, meaning that bank customers often pay more than 10% for the privilege of making a small withdrawal.

Overdraft Fees: More than 75% of banks automatically include overdraft protection on customer accounts. This means that the bank will honor checks and withdrawals even in you have insufficient funds, and then charge you a fee that is on average about $27. According to a recent study, these fees are incurred either during point of sale transactions or at ATM machines about 80% of the time. It would be easy for banks to inform the customer that they are overdrawn and that they will be expected to pay a fee if they complete the transaction, but most banks choose not to disclose that information to customers. Overdraft fees are big business and easy money for banks.

Credit Card Fees: Banks commonly charge an annual fee to each credit card holder, as well as fees for things like late payments and cash withdrawals. These fees add up and are a major concern when they come on top of interest charges and changing terms and conditions on credit cards.

You probably pay most of the above fees regularly and just consider them a cost associated with banking. These fees are steep and in many cases unfair, yet banks are rarely flexible in forgiving these fees for customers. To see banks now complaining about the fees that they’re being asked to pay to taxpayers, without whom many banks would be out of business, is ironic to say the least.

So far, there has been no response from the Treasury or the FDIC.

If you enjoyed this post, make sure you subscribe to my RSS feed!

Tags: ATM, banks, credit card, fees, Overdraft

• Watch For Hidden Costs In Refinancing
• Unemployed Unhappy With Debit Fees
• Big Banks to Provide Capital to FDIC
• Major Banks Need to Raise Capital
• Pros and Cons of Bank Nationalization
• Should We Let Big Banks Fail?
• Will Repaying TARP Funds Change Anything?
• Four Ways to Avoid Overdraft Fees