Magazine article American Banker

Fed Says Customer Fees Much Higher at Multistate Banks

Magazine article American Banker

Fed Says Customer Fees Much Higher at Multistate Banks

Article excerpt

Large banks and thrifts charged "significantly higher" fees than smaller institutions for many services last year, according to a Federal Reserve Board report issued Wednesday.

For example, large, or multistate, organizations penalized customers an average of $5.50 more for stop-payment orders and about $4 more for overdrafts than small, or single-state, banks, the report said.

Large banks charged noncustomers a "statistically significant" 43 cents more for withdrawals from automated teller machines and 14 cents more for ATM surcharges -- fees imposed on a bank's own customers for using its ATMs, the report said.

Small banks had "significantly higher" fees in only one category of nine for which enough data were available: They charged $1.60 more for returned deposit items -- the penalty for customers who deposit bad checks written by others.

Representatives of big banks said they offer more for a customer's money.

"That's the cost of doing business," said Joe Belew, the president of the Consumer Bankers Association. "In return the customer gets more convenience and more branches," he said, noting that banking with a multistate institution makes it easier to access cash while traveling.

Stephen Brobeck, the executive director of the Consumer Federation of America, agreed with Mr. Belew to an extent but said that consolidation and branch closures have granted considerable control to a handful of banks. That drives up the fees that consumers pay, he said, because their choices are limited. …

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