As Big Banks Raise Fees, You Have Options — Your Money – NYTimes.com

So now we know what the big banks’ New Year’s resolution was: Keep the profits flowing from basic checking accounts.

Robert Neubecker

 

Ron Lieber writes the Your Money column, which appears in The Times on Saturdays.

Earlier this month, Bank of Americaannounced its intent to test a number of different monthly fees for customers in some states, depending on the balance in their accounts or other relationships with the institution.

Right before the new year, meanwhile, JPMorgan Chaseinformed customers that under certain circumstances it would add monthly fees to many of the accounts it inherited from the now-deceased Washington Mutual.

This must feel awfully good for the veteran branch banking executives at Chase who looked stingy by comparison when WaMu ran ads all over the United States in the 1990s and 2000s telling consumers that free checking was a basic human right.

But Chase sure doesn’t sound happy. In a remarkable display of staying on message, it gave the same comment last week when The Wall Street JournalCNN Money and the trade publication US Banker asked it to explain the reasoning for the new monthly fees.

“We don’t want to raise fees on our customers,” a company spokesman said. “But unfortunately, regulation is forcing us to do it. And as a result, some customers may end up unbanked.”

This statement is striking for a number of reasons, and the eye-popping earnings the bank announced on Friday don’t exactly make the company more worthy of sympathy. So I’ve spent the last week trying to figure out why I was so sure I did not believe it the instant I read it.

So let’s take it apart, shall we?

First of all, Chase does want to raise fees on customers. It’s not the only bank that wants to, and this is a fine thing if you are a shareholder. After all, any business ought to strive to produce a product or offer a service that is so good or necessary that customers will keep on using it even after a price increase.

What companies don’t want to do is raise fees so much that they attract the attention of regulators or people who do what I do for a living. Yet this is exactly what the banks have done in the last decade.

First, they raised overdraft fees until the fees were often many times higher than the amount of the actual transaction that pushed the account balance below zero. At the same time, the banks and their partners at Visa andMasterCard forced merchants to pay ever more for the privilege of accepting these cards.

Eventually, consumers and merchants howled loud enough in protest that we ended up with overdraft fee regulation. There is also a Federal Reserve proposal percolating that may allow merchants to pay big banks much less when they accept those banks’ debit cards.

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If you are having problems, or think that your bank is charging you unnecessary fees… consult with the Comptroller of the Currency Administrator of the National Banks. The OCC is the cop-on-the-beat for those of us needing help with banking fee problems!

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