Academic journal article ABA Banking Journal

Fees and Consequences. (Editor's Column)

Academic journal article ABA Banking Journal

Fees and Consequences. (Editor's Column)

Article excerpt

YOU'LL JUST HAVE TO TAKE MY word for it. The cab driver was not on the lunatic fringe. He was taking me to a hotel in Florida for a conference last month. We got to talking and he asked what the conference was.

"A bankers conference," I replied.

To which he instantly responded: "Thieves."

I leaned forward, not sure I had heard him correctly.

"Did you say, 'thieves'?" I said.

"Yes, thieves," he replied quite clearly.

"Uh-oh," I thought, "what have I tapped into?"

Turns out it wasn't a loan turn-down or a foreclosure. It was that old bugaboo-- fees. The cabbie had been the customer of a large bank for 18 years. He had recently phoned the bank's call center to find out if a check had cleared, and while he was on the phone, he had the agent transfer $500 from savings to checking. The problem came when he saw the $5 service charge for the transfer on his next statement.

I suggested the bank probably had a minimum balance requirement to avoid such fees, which he understood, pointing out that not long ago he had $80,000 in the bank for several months. His point was that he felt banks make too much money to be charging $5 to do a transfer.

He had thought of changing banks, but the others didn't have as many branches, which was important to him.

The bank involved was large, but this is not a big/small issue. The conference I was headed for was ABA's National Conference for Community Bankers, where a banker said, "It's amazing how you can raise fees and not hear a thing."

I've defended fees in this space on occasion and would do so again. Fees are not evil--they are a form of payment.

Nevertheless the fact that you can raise many fees without complaint may be a false indicator. …

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