Pricing Returned Check Charges under Asymmetric Information.

The article discusses the general issue of bank charges for consumer transaction accounts. The legislative, judicial, and regulatory evaluation of bank consumer pricing is examined. A vector of fees like minimum balance, check-clearing policy, and not sufficient funds charges are used by banks to price checking accounts. Also, banks that are trying to be competitive may price a component service higher than marginal costs in order to segregate the financially responsible from the irresponsible of their customers.