Lakeland Bank, one of the latest banks to quit offering free checking due to the effects of the Durbin Amendment, revealed a new line of checking products on Tuesday, all of which have associated maintenance fees and minimum balance requirements.
“We realized there are challenges in our industry,” Robert Vandenbergh, the COO of Lakeland Bank, said, according to NJ.com. “We could have sat back and complained, or we could have looked for opportunities behind the challenges.”
To replace the free checking, new accounts are paired with identity theft protection and cell phone replacement services, in addition to merchant discounts. Customers will now be able to eliminate or reduce certain account charges by enrolling to receive electronic statements and using a debit card more frequently, NJ.com reports.
The Durbin Amendment, a provision of the 2010 Dodd-Frank Act, affected banks’ revenue drastically. As of the beginning of March, banks are on track to lose a projected $6 billion from the Durbin Amendment.
As a result, banks have opted out of free checking for more attractive financial products and services. Other banks like JPMorgan Chase & Co., Bank of America Corp. and Citibank have chosen to pursue new fees on certain accounts.
Lakeland Bank responded by marketing its “Elite” checking account, which includes a $6 monthly fee and free identity monitoring, as well as identity theft protection and cell phone replacement insurance. Vandenbergh said that the bank built the new account features around the banking habits of customers, according to NJ.com.
If Elite accountholders enroll in electronic statements, they receive a 50 cent discount off of the $6 monthly fee and a 25 cent discount fore each purchase with a debit card. Lakeland Bank also benefits, as it is not required to cover postage costs and the debit card purchases provide alternate revenue.