Local patrons feeling less of a pinch from new bank fees
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While banks nationwide have been ditching free checking accounts and rolling out new debit card fees, customers in Pittsburgh have remained largely unscathed.
Nine of the region's top 10 consumer banks continue to offer free checking, a survey by the Pittsburgh Post-Gazette this month found. That's the same number of banks that had free checking in the previous survey at the beginning of the year.
And, at least for now, none of the top banks -- which together account for almost 80 percent of deposits in the region -- are charging customers for using a debit card.
Early this month, Bank of America, the nation's No. 2 bank behind JP Morgan Chase, riled many customers when it announced plans to start charging $5 a month next year to use a debit card. Some other major banks rolling out debit card fees include Chase and Wells Fargo, which are testing them in select markets, and SunTrust and Regions Financial, which recently slapped them on customers with basic checking accounts.
The fees come at a time when banks have been scrambling to make up for big chunks of revenue squeezed by new regulations.
About a year ago, banks were barred from charging overdraft fees for debit card purchases unless customers opted in for overdraft coverage. On Oct. 1, new caps took effect limiting fees that banks collect from merchants every time customers swipe their debit cards.
The result has been bad news for many bank customers.
A recent survey by Bankrate.com found that the percentage of banks nationwide offering free checking tumbled to 45 percent, down from 65 percent a year ago and 76 percent in 2009.
Some also have discontinued debit card reward programs under which customers earn points toward cash or merchandise when they use their cards at the register.
Another Bankrate.com survey released this month found that the number of debit card reward programs nationwide fell by 30 percent over the last year.
Locally, debt rewards remained intact.
Six of the top 10 banks in Pittsburgh offer the programs -- one more than in the newspaper's previous survey nearly nine months ago. The additional program came from ESB Bank of Ellwood City, a newcomer to the top 10 list, replacing Parkvale Savings Bank in Monroeville, which is being acquired by Hermitage-based FNB Corp.
Although none of the local banks eliminated their rewards program, PNC, the area's biggest bank, recently stopped offering it to customers who have free checking accounts.
A spokeswoman for Citizens Bank, the regions No. 2 bank, said changes were coming to its debit rewards program but that the bank wasn't ready to announce details. She said the changes did not include new fees.
Financial institutions with less than $10 billion in assets are not subject to the federal caps on debit card swipe fees. Locally among the top 10, Dollar Bank, First Commonwealth, S&T, Northwest and ESB are small enough not to be subject to the caps. Among those five, all but First Commonwealth have debit card reward programs.
Among the five institutions here whose swipe fees are capped, PNC and Citizens offer debit card rewards while First Niagara, Huntington and FNB do not. (FNB will surpass the $10 billion threshold after the takeover of Parkvale Savings in January.).
As for free checking accounts, more local banks are now charging a fee if customers want their monthly statements mailed instead of delivered online.
In the previous survey, Dollar Bank was the only institution charging free checking customers a fee to get a paper statement in the mail.
Since then, S&T Bank started charging most checking account customers $2 for mailed statements. (People 50 and older with Four Star accounts are exempt.)
Effective Jan. 1, First Niagara will charge free checking customers $5 for statements via mail.
Bucking the trend of making free accounts less desirable, Huntington Bank recently enhanced its free checking offering -- called Asterisk-Free checking -- by eliminating a 25-cent fee on those accounts for PIN-based debit card transactions and adding a few perks, such as free automatic transfers from savings to checking in the event of an overdraft. (A year ago, Huntington started giving all checking account customers a 24-hour grace period to get their accounts into the black before assessing any fees.)
On the flip side, market leader PNC recently stopped reimbursing free checking customers for fees they incurred using non-PNC ATMs, in addition to eliminating their debit rewards.
But the bank also made it easier for customers to qualify for its two premium checking accounts, both of which reimburse ATM fees. The minimum balance went from $2,500 to $1,500 on Performance checking, which reimburses up to $8 per statement period, and from $10,000 to $5,000 on Performance Select checking, which offers unlimited reimbursements.
First Niagara and S&T Bank also reimburse ATM fees for certain account holders.
All 10 banks allow their customers to use their own ATMs for free.
First Published October 23, 2011 12:00 am