A study early this year by J.D. Power & Associates found that about 10 percent of customers changed banks in the past year, up from 8.7 percent in 2011 and 7.7 percent in 2010. The biggest reason cited was fees.
"Unfair bank practices and rising fees are prompting more and more consumers to consider voting with their feet and taking their money to another bank or credit union," said Suzanne Martindale, staff attorney at Consumers Union. "But many consumers don't follow through because moving your money takes a lot of time and money, and some bank policies make it harder than it should be."
Originally intended as deterrents for bad behavior and mistakes, bank fees have become a massive source of revenue for financial institutions, which have come to rely on the steady stream of income as a counterweight to more fickle income from interest on loans.
Banks are even quick to tout to Wall Street how much of their revenue comes from "noninterest income," which includes not only deposit service charges and penalties, but also fees and commissions for selling insurance, annuities, stocks, bonds, money management and other products. The higher the fee revenue, the better a bank's revenues look to investors. Last year, banks reaped $29.5 billion in overdraft fees alone, according to research firm Moebs Services.
Banks say the fees are necessary to cover their own costs of providing the services, such as servicing a checking account or maintaining a vast network of ATM machines. A report by Javelin Strategy & Research said maintaining an account costs a bank as much as $400 a year.
But bank fees also are among the biggest annoyances and irritants for consumers, who feel nickel-and-dimed whenever they try to do anything with their own money. And critics often question just how high the fees really need to be.
What's not in doubt is the growth of fees. Inded, Pew found that banks on average levy 26 additional fees on top of the 12 most common charges, with fees ranging from 10 cents to $125.
According to MoneyRates' semi-annual Bank Fee Survey, only 35 percent of checking accounts have no monthly service fee, down from over 38 percent last year.
Only 34 percent of traditional banks offered accounts with no monthly fee, while more than two-thirds of online banks did so. And among traditional banks, 46 percent of smaller banks, with less than $5 billion in deposits, offered free accounts, versus 21 percent of big banks with more than $25 bilion in deposits.
Bankrate's own survey found that 72 percent of the nation's 50 largest credit unions offered free checking, although that's down from 76 percent last year.
The average minimum balance to avoid a monthly fee at banks soared by more than $850, with noninterest accounts requiring $585 and interest checking requiring a whopping $5,587, the two rival surveys said. At the largest credit unions, the minimums ranged from $100 to $750.
Bankrate found that 30 percent of credit unions and 29 percent of banks don't charge ATM fees if a customer uses another institution's ATM. But they will charge a non-customer for using their machines. Credit unions commonly charge $2 and average $2.08, while banks commonly charge $3 but average $2.40.
And overdraft fees jumped for the second straight quarter, to an average of $29.83, MoneyRates said. Specifically, credit unions charge an average of $26.65 for the first overdraft, while banks charge $30.83 on average, according to Bankrate, which said the most common bank overdraft fee is $35.
Meanwhile, Consumer Federation of America surveyed the 14 largest banks in May, examining their overdraft fees and practices. The median fee was $35, but two banks charge $37.
Several banks charge tiered fees based on the number of overdrafts in the past 12 months or the size of the overdraft. And banks have instituted complex new rules governing when the fee kicks in, how many fees they can charge and over how many days. Total fees can reach $370 in one day at one large bank. Consumer advocates even accuse the banks of reordering checks and withdrawals to maximize fees.
New federal regulations now prohibit banks from covering consumers' overdrafts and charging a fee unless the consumers have specifically "opted in" to permit the practice, particularly at an ATM or a store's checkout counter. But the rules are confusing to people, and many banks aggressively sought to solicit such permission.
And more fees are likely coming, as banks start charging for things that have been free in the past -- such as paper statements -- or come up with new products and services that they convince consumers to pay for.
BANK FEES BY THE NUMBERS
-- 90 Percent of checking accounts in New York that have monthly fees.
-- $12 Median monthly fee for accounts without free checking.
-- $5,000 Median minimum balance needed to waive a monthly fee.
-- 49 Median number of pages in bank account disclosure documents.
-- $35 Median overdraft penalty fee.
Source: Pew Charitable Trust
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