Banks charge consumers more in fees every year. Last year, banks collected $38.6 billion in service charges, according to the Federal Deposit Insurance Corp.
That translates into higher fees for overdrafting accounts, wiring money or using another bank's ATM.
From an investor's perspective, this is something to applaud, says Scott Valentin, an analyst with the investment firm Friedman Billings Ramsey. Some of the larger retail banks may get as much as half their revenue from these sorts of fees.
Jim Sinegal, an analyst with Morningstar, says that many of the banks that make steady income from fees tend to avoid getting heavily involved in the subprime market.
Although some banks didn't lose money directly by making subprime loans, many are now suffering from an overall slowdown in construction and home loans. And that means they are depending more on income from fees.
But this is prompting some consumer backlash. Karney Hatch, for example, recently finished shooting a documentary called Overdrawn! inspired by his own experience of using a debit card to buy $65 worth of items, then getting charged $140 in overdraft fees.
In the film — and at the urging of consumer advocate Ralph Nader — Hatch sues his bank, Wells Fargo, in small claims court and recovers the overdraft charges, as well as the legal fees associated with his suit. The movie does not yet have a distributor.
"I guess what was compelling to me was that it's yet another instance of the rise of corporate power," mostly at the expense of consumers, Hatch said in an interview. "The banker used to be the most trusted person in town, and now they're likely the most reviled person in town ... if you even know the banker."
Banks say they spend time and money educating consumers about fees and how to avoid them.
Bank of America spokeswoman Diane Wagner said her bank gives consumers pamphlets, and its Web site includes a video with instruction on fees and how to avoid them. The fees charged, she said, simply offset the risks the bank incurs from customers who overdraft their accounts.
The Government Accountability Office issued a report earlier this year stating that some of these fees increased 10 percent since 2000. The GAO found it was very hard to get clear information about the terms of the fees, and it called for greater disclosure. The Federal Reserve, meanwhile, is currently considering a proposal allowing consumers the option of not participating in overdraft programs. Instead, those consumers' transactions would be denied when their accounts reached below zero.
Some say in the long run, consumers' dislike of fees may eventually hurt banks.
Bob Hedges, founder of Mercatus, a consulting firm, said his research shows that the No. 1 reason consumers don't trust their banks is that they feel they're charged too many fees. The greater the mistrust, the less likely the consumer is to invest more money with a bank over time, he said.
Instead, consumers increasingly are turning to alternatives. Investment houses like Fidelity and Charles Schwab didn't used to offer checking account and other banking services, but now they do. And they exploit consumers' concerns about fees and complex charges to market those services, Hedges said.
"They're all taking dead aim at traditional banking franchises," he said.