Banks became the eye of the financial crisis hurricane in 2008, when their operating and accounting practices led to instability in both consumer and commercial markets across the globe. Since then, new rules have been put in place to control the ability of banks to take advantage of consumers. The largest banks are finding ways around these rules, however, and new fees and charges have popped up throughout 2011. What will the new year bring for banks and their customers?

See: The Evolution Of Banking

Dodd-Frank Legislation
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, was Congress' response to the role of financial institutions in the recession. The Act is an attempt to overhaul the banking and lending industries. Two of its main purposes are to restrict the banks' own trading as well as to increase transparency of operations.

In 2012, the impact of the Act's mortgage lending rules will be felt by borrowers in a big way. New rules will restrict the lending criteria used by mortgage companies. The purpose is to ensure that lenders have a good faith belief that the borrowers will be able to pay the loan back, so that the mortgage crash of 2008 isn't repeated.

However, these new restrictions will likely result in fewer loans being approved and only those borrowers with pristine credit obtaining them. (What makes a credit history pristine? Find out with The Importance Of Your Credit Rating.)

The Volcker Rule
The Volcker Rule is an add-on to the Dodd-Frank Act and didn't come into effect until the end of 2011. Its main tenet is protecting consumers from high fees. The Rule restricts the amount banks can charge for debit card transactions. Banks claim that this will severely impact their overall revenues and are simply increasing other bank fees that are not subject to regulation.

A few of the largest banks, such as Bank of America, have started to implement new and higher account maintenance fees, with mixed results. In November 2011, Bank of America withdrew its proposed $5 debit card fee after substantial backlash from its customers. Expect banks to find new ways to quietly increase fees and charges in 2012. (For more, read The Ins And Outs Of Bank Fees.)

The Move to Credit Unions
Backlash against banks and their fee practices led many customers to dump their banks and set up accounts at credit unions, which are usually considered more customer-centric and are owned by depositors. Increasing bank fees in 2012 will ensure that this trend continues. Credit unions will market themselves in more high-profile ways and position themselves as champions of the people.

What the result of this move will ultimately be is anyone's guess. If banks are paying attention, they should keep fees reasonable and try to woo back customers. After spending the past year stripping off all incentives and benefits for customers, we may see some incentives return. However, would it be enough to bring consumers back into the fold?

The Bottom Line
The financial services industry will remain in flux in 2012 as it tries to negotiate around the edges of the Dodd-Frank Act. Many decisions that banks will make should impact customers' bottom lines, most likely in a negative way. Bank customers will have to remain vigilant to ensure they know what their banks are charging them and what banking opportunities exist elsewhere.

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