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Should Banks Be Able to Charge You to Access Your Own Money?

written by: •edited by: Michele McDonough•updated: 11/8/2011

In addition to feeling "taxed enough already," are you tired of paying more and more fees for the privilege of using your own money? Unfair bank fees are soaring, and consumers are voting with their feet and moving their accounts. Are you ready to join the movement? Here's what you'll need to know.

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    What's Going on With Bank Fees?

    Are you tired of unfair bank fees? Bank of America got a lot of publicity recently, but it probably wasn’t the type of advertisement they enjoyed. After all, what business really wants to be spotlighted on national news for trying to institute a usurious fee on its customers? While they made a quick decision to drop the fee based on public outcry, the whole proposal does beg the question of whether banks should charge you a fee to use your own money.

    In my opinion, it is poor business to charge me a fee to use my own money (after all, the bank isn’t offering to pay me anything for the privilege of using my money to make investments and loans). It's also a risky choice because I will just withdraw my money from your bank and trot down the street to one that is more customer friendly. Financial institutions are a dime a dozen, and I have the same loyalty to you as you do to me: zilch.

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    What's Happening Nationwide?

    Protesters want to stop rising bank fees. If you have been watching the news recently or following stories on some of the grassroots movements to protest outrageous bank fees, you’ll know that I’m not alone in my opinion or my choice of options.

    Kristen Christian is the organizer behind the recent Bank Transfer Day, which encouraged consumers to transfer their bank accounts to credit unions and smaller community banks. This seems to be a message that is spot-on with infuriated bank customers as the Credit Union National Association is reporting an additional 650,000 new credit union members since the announcement of the upcoming fee from Bank of America in September of 2011.

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    You Want to Charge Me What?!

    Are bank fees sucking you dry? Bank of America beat a hasty retreat on its proposed debit card fee (a four-day turnaround from announcement to withdrawal), but consumers should not let down their guard or stop their protests. According to a report by Blake Ellis, these financial institutions will simply turn to other, less overt ways to increase their profits.

    For instance, most consumers currently pay fees such as ATM fees if they make a withdrawal from a non-member bank or fail to meet minimum account balances on non-interest checking accounts. However, if they are not diligent in checking their bank statements, they may not notice the sharp increase in these rates. For instance, the average ATM fee for a non-member bank is up to $2.40, failure to meet minimum balances is at $4.37 and overdraft fees are at a whopping $30.83.

    To add insult to injury, take a look at how one bank is bumping other “typical" fees:

    TD Bank Fees

    • Excessive withdrawal fee - $9 (new fee)
    • Receive a wire transfer - $10 (old fee) vs. $15 (increased fee)
    • Certified check - $4 (old fee) vs. $8 (increased fee)
    • Money orders - $4 (old fee) vs. $5 (increased fee)
    • Stop payment - $25 (old fee) vs. $30 (increased fee)

    I don't know about you, but I'd yank my money out of TD Bank so fast, they wouldn't have time to try to dream up a fee to charge me for the withdrawal. My bank wouldn't think of charging me for common transactions such as getting certified checks or money orders, and they know if they try to charge a stop payment fee, my husband will be there in 10 minutes ready to sign all the papers to close his account of 30 years.

    Now, they did try to charge me a fee once upon a time, but he just marched down to the bank and reminded them of what good customers we are, and bingo! The fee disappeared and the apologies were profuse. This is consumer oriented banking as it should be done.

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    Fees Banks Don't Charge but Wish They Could

    Have to rob your piggy bank to pay those fees? The whole Bank of America story got me to thinking. I wonder what kind of fees banks would charge if they thought they could get away with them? Just for fun, I decided to try to predict what kind of outrageous fees banks might dream up next.

    Here is our top ten list of future bank fees you might want to beware.

    1. Standing in line - $5 (Count your money before you leave the counter. If you have to get back in line, you'll have to pay again!)
    2. Head of line privileges - $15
    3. Ask teller a question - $2/question
    4. Cup of coffee - $2 (actually, not a bad deal at today’s rates; you might want to hang out at the bank rather than the coffee shop.)
    5. Reorder checks by handing the form to teller - $5
    6. Use of ballpoint pen (chained to desk) - $1
    7. Request envelope for money - $1.00
    8. Money inserted in envelope by teller - $2.00
    9. Teller hands you the envelope and you insert the money - $3.00
    10. Use of drive-through window with teller - $5.00

    Well, I could go on and on, but I think you get the point. Banks provide a service to you; they are not doing you any favors. They use your money to make money, and they forget that they work for us. The customer service aspect of banking is as extinct as the dodo bird.

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    Benefits of Banking Locally

    Banking locally puts your money back in your pocket There are many compelling reasons for consumers to yank their money out of the gigantic mega-banks and reinvest it in small and midsize community banks and credit unions. The fact that not-for profit credit unions use profits to enable them to make low-interest rate loans to members or they distribute them to members is just one.

    These financial institutions offer better interest rates and fewer (or no fees) for additional services. Customer service is at a higher level, and the consumers feel like a valued friend rather than just another account number. Because the interest rates and fees are more affordable, it is easier and more beneficial for small businesses to get loans, and clients can pocket the savings or spend it in the local economy, which is a win-win for everyone.

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    Can Bank Protests Work?

    Just say no While the initial response to movements such as Bank Transfer Day, Move Your Money Day and Dump Your Bank Day has been to infuse credits unions with an additional $4.5 billion in deposits, financial experts are predicting that the protests won’t make a difference.

    Why not? The experts say moving accounts is time-consuming and labor intensive especially for customers who have multiple accounts or use services like automatic bill pay or direct deposit. In addition, a report from Javelin Strategy & Research found, “Six out of 10 new checking account customers abandon online applications at new financial institutions." The report goes on to explain how the hassle of trying to open a new account frustrates consumers who then abandon their efforts.

    However, I think this time the so-called experts have dropped the ball and are not in touch with what is really going on in America. Yes, bank customers are tired of being nickeled and dimed to death with frivolous fees. They are also tired of reading about bank fat cats raking in huge bonuses and profits with one hand while begging for financial bailouts with the other.

    As a group, Americans are tired of being overcharged, overtaxed and under represented by their elected officials. Consumers have other choices besides the giant banks like Bank of America, Chase, JPMorgan and Wells Fargo & Co. They are voting with their feet and wielding the power of the purse. More power to them!

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    What Do You Think About Unfair Bank Fees?

    You've heard my story...what's yours? I'd love to hear your banking horror stories (or success stories). Just drop me a line in the comments section and let me know what you are thinking. I'm waiting to hear from you.