Big Banks, Bigger Fees 2001: A National Survey Of Bank Fees

Executive Summary

More than 12 million American families can't afford bank accounts. The rest of us are paying too much, especially if we bank at big banks. Meanwhile, in 2000 banks recorded nearly $72 billion in profits, narrowly missing a tenth straight year of new record profits. According to the Federal Deposit Insurance Corporation (FDIC), deposit account and ATM surcharge fee income are important parts of those increased profits.

This 2001 national survey, prepared by the state PIRGs with assistance from state and local member groups of the Consumer Federation of America (CFA), updates our 1993, 1995, 1997 and 1999 national surveys. The disturbing trend of more, and higher, fees is continuing. Data from 2001 are compared on a state-by-state basis and to 1999 national averages.

Since bank deregulation began in the early 1980s, the PIRGs and other consumer groups have conducted numerous studies documenting skyrocketing consumer banking fees. Our studies have helped to focus national attention on the problem of skyrocketing bank fees. Our results are substantiated by the results of the Federal Reserve Board's annual fee reports to Congress. ¹

In 2001, our findings show that the cost spread, or "big bank fee gap," between big banks and small banks continues to widen. In 2001, the best deal, for consumers who qualify for membership, is still at member-owned credit unions. Others can find lower fees at small, locally-owned community banks.

On the positive side, this year's study finds more banks, even some big banks in some markets, offering free checking accounts. On the negative side, in addition to the fee increases, we note profoundly disturbing trends in the availability of bank fee information that helps consumers shop around and allows researchers to investigate fee trends. PIRG is sending letters to bank regulators describing the difficulties we are having obtaining bank brochures and understanding bank fee descriptions. If we are having difficulty shopping around, so are consumers.

¹ Our results are similar to data from numerous government, consultant and industry data on bank costs and fees for consumer deposit accounts. The author talks on a regular basis to investigative reporters who conduct their own local surveys, with confirming results.