NEW YORK - Big banks, facing declining revenue and a regulatory climate that leaves them fewer creative ways to make money, are quietly introducing or experimenting with fees that are sure to outrage customers.
Bank of America was shouted down by angry customers in the fall when it tried to impose a $5 monthly fee for using a debit card. JPMorgan Chase and Wells Fargo backed off plans to impose their own fees.
But the major banks have imposed or are testing other fees. Since November, Wells Fargo has charged $15 a month for some checking accounts unless customers have three accounts with the bank, maintain a minimum balance of $7,500, or have a Wells Fargo mortgage.
Some Citibank customers are being charged $20 a month unless they keep $15,000 in their accounts, up from $6,000. They're also being dinged with a $2 fee for using non-Citi ATMs if their balance falls below a minimum.
Bank of America, even after the backlash of the fall, is testing a menu of checking accounts in Georgia, Massachusetts, and Arizona with monthly fees of $6 to $25.
Banks aren't charities, and they say they need to make money or at least cover the cost of doing business.
"Banks have a short-term memory," retorted Norma Garcia, senior attorney at Consumers Union. "These fees affect all consumers, but particularly impact the most vulnerable, who have the least capacity to meet minimum balances and avoid the fees."
Nothing in banking is free anymore. All of the largest banks in the United States offered free checking with no strings attached until 2009, and almost none do today, said Mike Moebs, founder of Moebs Services, a financial research company. And what wasn't free before costs a lot more these days. Moebs' research shows cashiers' checks that used to cost $3 now cost as much as $12.
Historically, banks have made money off something called interest rate spreads. They borrowed money cheaply, lent it out at higher interest rates, and pocketed the difference. But interest rates are at historic lows, making it harder for banks to charge high rates when they lend, and squeezing their profits. Regulatory rules since 2009 have also curtailed traditional bank fees, costing them billions of dollars.
Banks' revenue has dwindled since these laws took effect. Bank of America revenue last year was $93 billion, compared with $121 billion two years before. The banks are trying to figure out how to make up that difference, but their fees still land hard on customers. The $5 debit card fee that Bank of America announced Sept. 29 became a flashpoint of anger, including for protesters in the Occupy movement, and the bank backed down.
Consumer advocates worry the fees will push people out of banking and toward more expensive services, like payday lenders and loan sharks. "A significant part of the population will be squeezed out," said Nancy Bush, founder of banking research group NAB, "and that is absolutely wrong."