Everyone’s still talking about it: bank fees.
Just this week, Pittsburgh-based PNC Bank settled a $90 million class-action lawsuit over excessive overdraft fees, joining a growing list of big banks that have already recently done the same thing including JP Morgan Chase, Bank of America and TD Bank.
The basic tenant of the lawsuits is that these banks improperly processed debit card transactions to make the most of overdraft fees.
It was just the most recent installment of the ongoing saga of big banks charging customers for a whole host of services in order to make up the revenue shortfall caused by lower interest rates and changing federal regulations on overdraft charges and late payments on credit cards.
Big banks have introduced new fees for everything from overdrafts to debit card usage and customers responded passionately – some even switching to community banks and regional credit unions, which generally have fewer regulations and therefore, fewer fees.
Some of the big banks have responded to the backlash by reducing or eliminating fees, but don’t be fooled – in many cases, the fees are still there.
You just have to look a little harder to find them.
For example, Atlanta-based SunTrust – which has over 1,600 branches in the Southeast – will soon require customers to carry higher minimum balances on their basic checking accounts to avoid paying fees.
The changes, which will go into effect August 24th, affect customers with EveryDay Checking accounts and will require customers to maintain a minimum daily balance of $1,500 (up from the current $500 requirement), or have a monthly direct deposit of at least $100 in order to avoid a $7 monthly service fee.
Overdraft fees will also increase by $11 to $36 (instead of the current $25).
Customers with other types of accounts – including Student Checking and Solid Choice Banking – will have to pay a $2 fee for using any non-SunTrust ATM.
This comes just a few short months after Wells Fargo introduced its own monthly fee for former Wachovia basic checking customers who now fail to meet the new, higher minimum daily balance requirement ($1,500) in their checking accounts or do not have a total monthly direct deposit if at least $500.
All of this is sure to get customers riled-up again and rallying against the big banks, which in turn opens the door for community banks and credit unions to woo customers away.
There has never been a better time for community banks to convince big bank customers to finally make the switch. What is your bank doing to take advantage of this opportunity?
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Neal Reynolds has worked with hundreds of banks and credit unions around the country helping them to grow core deposits and market share without growing their marketing budgets. Contact him at [email protected].
