The Washington Post
WASHINGTON — The bigger the bank, the higher the fees it charges consumers, according to a survey released Thursday by a nonprofit research group.
The U.S. Public Interest Research Group also found that, in general, individual fees are rising and banks increasingly rely on fee income — rather than interest on loans — to boost profits.
The study found, for example, that a consumer who doesn’t maintain the required minimum account balances will be charged an average of $228 this year for a checking account, up 5 percent from $217 in 1999, when the group last surveyed the industry.
But if banks are divided into large and small groups, the results are much different, the research group found: Among the nation’s top 300 banks, checking account fees for 2001 will be $266 on average, a 13 percent increase from 1999, while at smaller banks fees declined 6 percent on average to $191 this year. Customers of credit unions, which pay significantly lower taxes than banks, saw an even steeper drop of 10 percent, paying about $101 for a checking account.
"When it comes to nickel-and-diming consumers with new fees for this and higher fees for that, big banks are leading the way," said Ed Mierzwinski, PIRG’s consumer program director. "Banks increase fees, they invest new fees and they make it harder to avoid fees."
Banks make it hard for a consumer to comparison shop because they disclose fees in a manner that often makes the fees hard to find and understand, the survey concluded. Mierzwinski said the Federal Reserve Board should require banks to post a fee schedule on the Internet.
The study surveyed 521 banks and 144 member-owned credit unions in 32 states and the District of Columbia. The 1999 study surveyed 526 banks. The fees studied include monthly maintenance fees, ATM fees and bounced check fees, the group said.
Bank industry profits have climbed steadily since 1989, in direct correlation to a rise in fee income, the group said.
Spokesmen for the American Bankers Association said such surveys can be misleading because individual consumers often pay less than a bank says it charges, either by maintaining minimum balances or taking advantage of other products that enable them to avoid charges.
The PIRG survey’s findings are similar to those released in a Fed-sponsored survey a year ago. Both surveys found that the bigger the bank, the higher the fees for automated teller machine use, bounced checks, stopped payments and maintenance of basic checking accounts.
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