The Perfect Time for Bank Shopping

Financial re-regulation, known as the Dodd-Frank law, is costing consumers a bundle, and here are a few tips to make sure you're not stuck paying more than you have to, writes Bob Carlson of Retirement Watch.

Dodd-Frank was supposed to be a pro-consumer, anti-bank law. The law did close a lot of ways banks were making money.

But the banks aren’t poorer for it. They’re increasing other fees and dropping services in order to maintain their revenues and earnings. Of course, they’re also looking for ways to recover some of their losses from bad loans made during the pre-2007 boom.

You don’t have to sit still for the higher fees on checking accounts, debit cards, and other services. If you do, your bank likely will take several hundred dollars annually from you. Otherwise, it's a good idea to look around for alternatives to your checking account.

• Before looking around, be sure you're getting the best deal possible from your current bank.

Most banks will give credit for all your accounts with them when computing fees. And many fees generally are reduced or waived for customers with higher balances. Credit card and mortgage balances often are counted for this purpose. If you have a mortgage with the bank, you shouldn't be paying fees for checking.

Of course, the bank might not give you the best deal on the mortgage, and the savings from getting your mortgage elsewhere with a lower interest rate could be more substantial than the bank fees. Or you may not have a mortgage. In these cases, you should shop around for better checking alternatives.

• After looking at banks in your area, take a look at online banks and brokerage firms.

In fact, you may not need a bank checking account. Some of the best deals on checking accounts are at brokerage firms.

Online accounts, whether at banks or ! brokerag es, can be found without most of the fees charged by traditional banks. You should be able to avoid monthly fees and minimum balances.

Many also will not charge for check printing, overdrafts, and foreign transactions. A brokerage, for example, often will transfer automatically funds from your investment account to the checking account when needed to cover checks or withdrawals.

Many of the online banks and brokerages waive all ATM fees. Most conventional banks don't charge fees on transactions their customers make on their own ATMs. But use another bank's ATM, and you are likely to be charged fees by both the bank owning the ATM and your own bank.

The fees usually are a dollar or two by each bank per transaction. Many online banks and brokerages will pay the fees charged by the bank owning the ATM, and not charge you a fee for using it.

The online banks and brokerages also will pay interest on checking balances, even very low balances, though the yields today are extremely low. The online banks and those associated with brokers are FDIC insured.

The discount brokerages are leaders in this field, including Charles Schwab, Fidelity, and TD Ameritrade. The most popular online banks are ING Direct and Ally Bank (part of GMAC Financial Services).

The downside of online banks and brokerages is that you don't have a place for in-person transactions, especially deposits. Some of the brokers have offices around the country, and you may live near one of them.

Otherwise, when you are paid with a paper check you have to mail it to the bank and wait for it to be processed and credited to your account (which usually takes a few days). Questions, complaints, and other transactions are handled online or on the telephone.

Another potential downside is it may be harder to obtain a home equity line of credit or other loan from a local bank when you don't have a checking relationship with the bank, or you might have to pay a higher rate on the loa! n.

You might even want to completely dispense with a traditional checking account.

You’ll find many younger people doing this, and there’s no reason you shouldn’t consider it.

Instead of a checking account, make all your purchases with debit cards associated with a savings or brokerage account or credit cards. Almost every retailer now accepts plastic for payment, even taxi cabs and fast food restaurants.