Thursday’s column: In the age of bank gouging, it can pay to think small
The Roanoke Times | File
My wife is manager of a small retail store in Roanoke County. The other day I asked what her customers were talking about.
“Bank fees,” she shot back. “That’s what everyone is talking about. They hate’em.”
The big national banks, such as Bank of America and Wells Fargo and some of the larger regional ones such as SunTrust, have recently announced they will soon end things such as free checking.
There’s different caveats with these money-grabbing schemes. For example, SunTrust won’t charge you $7 monthly for checking if you have direct deposit, or if you keep at least $500 in your checking account.
They’re also levying new monthly fees for debit cards. Those range around $3-5 per month and will apply whether or not you have direct deposit or keep a minimum daily balance. And that charge is just for starters.
Soon they’ll begin hiking those, and blaming bank regulation for it, kind of like the electric company blames its rate hikes on the EPA.
Keep in mind that these are some of the same yoyos whose banking acumen nearly collapsed our economy less than three years ago, which resulted in taxpayers having to bail them out to the tune of nearly $1 trillion.
There’s two things you can do in a situation like this.
The first is, you can accept it, and pay more of your hard-earned dollars to those wizards of finance for the “privilege” of keeping your accounts with them.
The second is, you can switch your accounts to smaller banks or credit unions. For the most part, they still offer no-fee checking and debit cards.
Member One, the largest credit union in the Roanoke region, has seen a recent influx of business.In September alone, new accounts were up 17 percent compared to September 2010, said Mark Hudzik, the credit union’s chief development and public relations officer.
Credit unions have come a long way in recent years, especially in the area of convenience. For example,Member One has online banking, and its customers can make deposits at more than 4,400 branches of affiliated credit unions across the country. Member One also is linked to more than 250,000 no-fee ATMs.
At credit unions, excess revenue is ploughed back into member services — for example, lower interest rate credit cards, car loans and home equity lines. Many credit unions offer financial planning services for customers, too.
The interest rate on a major credit card at Member One is currently 9.9 percent. That’s 3 percentage points lower than my major-bank credit card. And they offer a year-long introductory rate that’s under 6 percent.
Not everybody can join a credit union, however. There are various rules. For example, you have to work for an affiliated business or live in a defined place.
Someone who doesn’t qualify can always switch accounts to a smaller bank, such as Hometown Bank or Valley Bank, both of which are based in Roanoke. And people are taking that route, too.
“We’ve seen a pretty dramatic increase in [new accounts] in the last five to six months, but even more in the last month or two,” said Susan Still, Hometown’s president and CEO.
In September, new accounts at Hometown bank are up 50 percent over September 2010, she said.
Valley Bank pays interest to free-checking customers who use their debit cards more than 12 times per month, CEO Ellis Gutshall told me. Its new accounts in the third quarter of this year are up 27 percent over the second quarter, he said.
“We’ve seen a nice uptick in the last six weeks to two months, not just with consumer accounts but with some substantial commercial accounts, too,” Gutshall said.
I asked Still and Gutshall if they anticipate their banks will follow the bigger banks and begin charging checking account and debit card fees like the big boys.
Both replied “no.”
“We consider that just a part of our account services,” Still said. “We think that’s an important part of banking.”
The long and short of this is that the big banks care about serving businesses. They don’t care about us little guys, except to the extent they can squeeze us for outrageous fees.
But you don’t have to take this lying down. You may not be able to change your electric provider, but you can change banks and save yourself some money in the process.
Vote with your feet, and your accounts.
October 13, 2011 - 6:00 AM
Just ditched my bank for another for free checking due to fees. If more people would do this it would speak more volumes than what the idiots on Wall Street are doing….but I guess most would need jobs to have money to put in a bank account….professional protester wouldn’t pay much.
I joined Member One about five years ago when SunTrust started killing my bank account with different fees. My favorite was an overdraft fee on an overdraft fee due to the fact they “lost” my deposit from the day prior.
I’ve never looked back. It makes no sense to have an account at a major bank today. We bail them out with tax dollars, and then we are expected to bail them out again with fees? I don’t think so.
Banks represent the worst of capitalism. Credit Unions represent the best of socialism.
I am a SunTrust account holder, having just transferred 2 months ago from Wells Fargo. I have a checking account that has no fees simply because I have direct deposit. This means I don’t pay a monthly maintenance fee, nor a fee to use my debit card (which is my primary source of paying for things.) This account also is interest-bearing. So I’m getting like 4 cents every month just for the privilege of letting them use my money. I also don’t pay to use non-SunTrust ATM’s by SunTrust, and get withdrawal fees levied by other banks refunded to me.
To keep this account fee-free under the new structure, I have to now have a $5,000 daily balance OR a mortgage with SunTrust. But at the same time they are reducing fee-waivers for ATM withdrawal.
I could down to their “Everyday Checking” account and lose the interest-bearing feature, and completely eliminate the fee-waivers for withdrawal at other banks as I never get cash anyway. (it’s just easier to get cash back at the grocery.) But with this comes a new $5 monthly fee for debit card usage.
It’s only $5. But it’s the principle in the matter. They’re passing down to the consumer a fee to offset a reduction in their profits due to regulation. They want us mad so we’ll back candidates that support their greed. I think it’s going to backfire with the move to credit unions and smaller banks that are willing to take extra money from fed up consumers in exchange for paying for those fees.
When the Right wing talks about Trickle-Down Economics, this is what they mean. When hard times befall the mighty, those hard times trickle down onto the masses. Rarely does it trickle down when times are good and plenty.
I’m switching to a credit union, and there are many I know at BoA, Citi, WF, and SunTrust who are doing the same. Bandwidth and technology to support these transactions have gotten nothing but cheaper over the years, but surcharges have gone up and up.
It looks like “Elvis has left the bank building.”
I think credit unions would be more like communism, since the members are technically the owners of the credit union (that common ownership thing), based on how they operate. Could be wrong though, but it’s definitely clear that credit unions offer far superior customer service compared to the big banks.
I dumped my bank for their overdraft tricks, they didn’t slam me with usage fees though. The small banks in the area I’ve seen seem to be very customer-friendly too, with very few fees and great service. But I love my CU, and I’ll keep doing business with them.
A friend of ours finally is dumping her Bank of America accounts. Not only have they been hacked twice (no fault of the bank I don’t believe), but they started hitting her with $5 monthly charges to keep each account since she didn’t have enough money in them ($500 or $1000…don;t remember), but now the debit card fees too. She had 4 different accounts with them (personal and business), and wound up paying something like $30 a month just to bank with them. Why she didn’t switch sooner, I don’t know. But she is finally joining the crowd.
“The Energy Department says on its website that the $1.2 billion loan to help build the California Valley Solar Ranch in San Luis Obispo County, a project that will help create 15 permanent jobs, which adds up to the equivalent of $80 million in taxpayer money for each job.”
Read more: http://www.foxnews.com/politics/2011/10/12/solar-firm-that-received-12-billion-federal-loan-plagued-by-financial-problems-702546811/#ixzz1afUu95U1
obama is pathetic..there is NO industry here…of course obama sticks his head in where the sun dont shine all the time.
Ginned up. 100% fake. We’re sorry banks were forced to make up for lost revenue caused by Dodd-Frank, but the simple solution is free-market. If you don’t like the fees, don’t whine or protest, SWITCH BANKS.
I realize Dan was handed down orders from the DNC to do a column trashing “Big Banking”.
Dan takes orders? I’ll have a salami on rye. Thank you.
What does solar energy have to do with banking fees?
pammalla doesn’t let herself be restricted by anything so pedestrian as “topics”.
Great column Dan.
“Ginned up. 100% fake.”
What on earth is fake about what was posted? That people are fed up with banks screwing them both ways?
“If you don’t like the fees, don’t whine or protest, SWITCH BANKS.”
That was the point of his article. His last couple paragraphs, verbatim:
“But you don’t have to take this lying down. You may not be able to change your electric provider, but you can change banks and save yourself some money in the process.
Vote with your feet, and your accounts.”
Good gosh, would it kill you to read the whole article before you pick it apart?
What’s all the fuss? Who uses a debit card anyway? BofA (at this point) only requires a DD of $250/month to avoid checking fees. I use a cashback CC for all my purchases (I use the website to pay the charges daily so I never have a balance…couldn’t care less what their IR is).
In the end, they pay me about $750/year plus I use the online bill pay so rarely write checks or buy stamps.
Dan takes orders? I’ll have a salami on rye. Thank you.
Dan is best at serving up baloney, hon,
Finding myself in partial agreement with Suzie on this (yeah, weird territory) at least on the part about what to do if you don’t like the fees.
I’m in the process of comparing my big bank’s fees with a credit union’s. Anticipating that I’ll be dumping my big bank soon.
Why are banks switching to such high fees? Why do oil companies charge $3+ per gallon for a commodity (gasoline) that could be sold profitably for far less? Why does Netflix attempt to double-charge its customers for services which used to (and soon will again) carry one charge? Answer: Because they think they can. In some cases, they are correct; in others, they are not.
Dan, I’m in the mood for Mexican today. Should my lunch friends and I fax our lunch orders to you or email them?
Freedom First Credit Union: local so my money stays here, same products & services as the big banks, no outrageous or hidden fees to use MY MONEY.
Suzie…the bank/credit union is a little bigger than the Roanoke Valley.I know you have your favorite bashee…but youre shooting bb-s.
You actually make a little bit of sense. Change banks… OR (and my favorite that you didnt state) USE A CREDIT UNION.
and even if you do just change banks…Isnt that a protest?
Hootiefish,
Let me tell you a little bit about Suzie. She doesn’t like my viewpoints, and she’s fallen into the trap of allowing her life to be governed by my thoughts, as expressed in my columns and on this blog. Almost everything she writes here is a reaction to me.
It strikes me as a horribly sad way to live, but it is what it is. I mean jeesh, at least I get paid for this.
I bet if the police were to raid Suzie’s house it would be like a scene from one of the crime dramas on TV. There would be pictures of Dan all over the wall intermingled with clippings of Dan’s articles. Also the floor would be covered with print outs of every blog Dan has posted and every mention of Suzie would be highlighted in yellow. She probably also has a list, written on a notepad, of every name who has posted anything about her. Crap, I just made that list! Oh, nevermind I made that list a long time ago.
14 Suzie doesn’t like my viewpoints
I have no idea what Dan means. I just praised him for admitting that the GOP was the party of the poor, and that I agree with him the only fair thing to do is make those 47% who pay no taxes to assume their fair share of the burden.
Actually, I disagree with pap wherever it comes from, and since this is Dan’s column, it so happens he initiates most of the discussion to agree or disagree with.
I agree with Original Greg. I completely dominate her thoughts to the point that all of hers are a reaction to mine. What an utterly sad and pointless way to live.
“. . .since this is Dan’s column, it so happens he initiates most of the discussion to agree or disagree with.”
See? Told you I was dominating her thoughts. I play her like a fiddle, every day, and I get paid for it.
OtherGreg’s post made me flash on the garage in A Beautiful Mind.
Kind of a silly argument, Dan
You intiate the discussions by posting them on your blog for comment…do you accuse all of the OTHER posters of being obsessed with you because they comment on your blog?..or only those that don’t agree with you?
Dave H. Dave, Gdad, Kristen, Art etc…ALSO make comments on your blog EVERYDAY, some of them whether they have something to say about the topic or not….do you think they ALSO are obsessed with you?
Hey Regs…Dan just told you that posting on his blog is a “sad way to live”.
Sharon N…..dont waste your time here. they will dog you about spelling, grammar and all kinds of stuff that, at least on this blog, are meaningless. they never take a second to think that someone might have severe rheumatoid arthritis…no just insults…its the liberal way you know.
pammala, you’ll have to forgive us….we weren’t aware that severe rheumatoid arthritis robbed people of their language skills.
“They never take a second to think that someone might have severe rheumatoid arthritis.”
Oh goodie. We are now teed up for another cloddish insult from BM, like what happened when Richard Beason attributed some minor typos to a disability.
See? Told you I was dominating her thoughts. I play her like a fiddle, every day
In truth, Dan, it’s the other way around. I was looking at your blog threads from 2009. Back then it was mostly quirky items, not much hard political stuff. Since I’ve joined, you have become a Dan Radmacher clone as your blog has devolved into a trashfest of partisan anti-conservative threads. I guess Suzie has stirred the pot, so you feel the need to do likewise. Everybody wants to be Suzie, I suppose.
Girl has too much power, I guess. (hair toss).
kristen in your stupid little mind….I never said I had rheumatiod arthritis. see how the libbies jump before looking!! and no I dont have to forgive you. stay off the crack, honey.
Well, darn.
@29 Wow, calm down and back off Kristen, you fool. You are the one that posted, and she responded, sarcastically, but never said a darn thing about you.
Aww, have I been banned? LOL.
I type a comment, and if it’s too long and times out…when I used to just be able to go back and retype the “CAPTCHA code” and resubmit, now the comment disappears.
Oh, maybe I just need to not “time out” on my post.
Pammala:
I would MUCH rather expose my lack of typing, or proofreading skills than expose the ignorance shown by some of the perfectly typed, prefectly composed comments on this blog.
But you are right, I am wasting a lot less time beating my head against the wall with these folks than I used to.
#29 Usual stupid word games. pammala, why even bring up RA if you don’t have it? That was about as dumb as it gets.