Consumer Watch: Bank charges to cash check drawn on one of its accounts

As a pianist and singer, Steve Cohen can count on lots of good things in life. Frequent gigs. Recording opportunities. Friendly vibes and happy faces when he plays private parties.

But Cohen, like most musicians, can't rely on a steady paycheck. So when he passed by a PNC Bank last week with a $150 check from his booking agent in his pocket, he decided to go in and cash it.

Cohen, 45, didn't have an account at the Cottman Avenue branch. He uses Nova Savings Bank, near his Center City home. But Cohen assumed the bank would fully honor his agent's check written on a PNC account.

He was wrong. PNC was happy to cash it - but only if he paid a $10 fee.

"I don't think it's right," says Cohen, who contacted "Consumer 9.0" to complain. "When there's a check written on a bank, the bank should cash it."

Cohen says he would have happily guaranteed the check with his Visa card. What he didn't understand was why the bank demanded a cut of his earnings - more than twice the 2 percent or 3 percent cut that a check-cashing store might have taken.

"I've just never seen a bank operate that way," he says.

Apparently Cohen, who sometimes records as "Elton Costello" and bills himself as the "Philadelphia Piano-Man," is a bit of a throwback on financial matters, too.

PNC spokesman Fred Solomon says the bank has long charged noncustomers for cashing such checks, though he says the fee was recently raised from $5 to $10.

Advocates such as Gail Hillebrand, a senior lawyer at Consumers Union, say fees such as PNC's reflect two long-term trends: banks' growing taste for revenue beyond the interest-rate spread that was their traditional source of profit, and the deregulation that began in the 1980s and has lately come under increased scrutiny.

Hillebrand says federal regulators, led by the Office of the Comptroller of the Currency, have taken a laissez-faire attitude toward bank fees since the early 1990s, while blocking some states' attempts to limit some charges.

Kevin M. Mukri, a spokesman for the comptroller, says the office welcomes consumer complaints. You can contact its Customer Assistance Group at 1-800-613-6743, or get a form online at www.occ.treas.gov/customer.htm

But don't expect any help when it comes to fees such as the one PNC charged Cohen.

"Basically, the regulations allow banks to charge for services as long as they're disclosed," Mukri says. "If the consumer agrees, then the bank can charge that fee."

Not all area banks are quite as aggressive as PNC on charges to noncustomers.

TD Bank and Citizens Bank say they'll still cash one of their own checks for a noncustomer with proper ID - though Citizens will insist on a thumbprint. Wachovia Bank doesn't charge for cashing a personal check written by one of its account holders, or for a small check from a business. But it charges $5 for cashing a corporate check for $50 or more.

It's not always clear why banks charge some of their fees. But one easy distinction is that some are the price of convenience, such as fees for using another bank's ATM network, while others are imposed because banks want to discourage things they consider nuisances - or at least profit from them.

The fee sought from Cohen plainly is one of the latter.

Solomon says PNC wants to encourage noncustomers to open accounts while shortening lines for its account holders. "The fee helps us reduce the number of noncustomers at our teller windows," he says.

Hillebrand says the real goal may be discouraging less-desirable customers from visiting the bank.

"If you think about who doesn't have a bank account in America, it's a different set of people from those who do," she says. "Maybe those are the particular people the bank doesn't want in its lobby."

Like Cohen, she laughs off PNC's suggestion that the bank is also trying to lure noncustomers to sign up:

"That's why we mistreat them - so they'll open an account with us?"