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Coronavirus Fees to Watch

Call it a coronavirus tax. Businesses and schools are tacking on fees to cover the cost of increased protective measures against COVID-19 as well as to make up for lost revenue. Some surcharges are only a few bucks, but others amount to hundreds of dollars.

Here are several places you may encounter these new fees:

Mortgage lenders. Mortgages that are refinanced and sold to Fannie Mae or Freddie Mac will be assessed a 0.5% fee on the loan amount starting Dec. 1, 2020. The fee is expected to be baked into the loan's interest rate, boosting it between 0.125 to .25 percentage points. Example: On a $250,000 loan, the fee adds up to $1,250. The fee won't apply to refinances under $125,000.

The Federal Housing Finance Agency, which regulates Fannie Mae and Freddie Mac, says the "adverse market refinance fee" is necessary to cover projected COVID-19 losses of at least $6 billion related to mortgage relief programs provided during the pandemic.

Colleges. Some schools are charging students taking in-person classes a "coronavirus mitigation fee" — ranging from $50 to as steep as $950 — to cover the costs of COVID-19 testing and increased cleaning and disinfecting on campus.

Dental offices and hair salons. Some dentists now charge $10 to $20 for an "infection control fee" to cover the cost of protective equipment, such as masks and gloves, as well as office sanitation. Salons and barber shops, too, are tacking on a $3 to $5 fee to help pay for increased cleaning and to make up for lost business after they reduced the number of customers allowed in their establishments.

Restaurants. Some restaurants have added a surcharge after business had dropped off and food prices rose during the pandemic. This is likely to expand. Diners in New York City may soon see a 10% "COVID-19 Recovery Charge" that's designed to help smaller restaurants stay afloat.

Checking accounts. Banks continue to offer struggling customers some concessions on credit cards, personal loans, and mortgages. But not so with checking accounts. Banks raised the maintenance fee on the accounts during the first half of the year by an average of 26 cents a month — or $3.12 for the year, according to a survey by personal finance site MoneyRates.com. That pushed the average checking account maintenance fee to an all-time high of $14.39 per month — or about $173 a year.

On the upside, airlines waived some fees. With fewer consumers traveling during the pandemic, United Airlines, American Airlines, and Delta eliminated their $200 fee to change domestic flights.

Please note: The contents of this publication provided by ICMA-RC is general information regarding your retirement benefits. It is not intended to provide you with or substitute for specific legal, tax, or investment advice. You may want to consult with your legal, tax, or investment adviser to review your own personal situation. Some of the products, services, or funds detailed in this publication may not be available in your plan. This document contains information obtained from outside sources and it references external websites. While we believe this information to be reliable, we cannot guarantee its complete accuracy. In addition, rules and laws can change frequently.

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