A consumer research group says its survey of American banks show "outrageous" fees for customers who are "gouged," but a Utah Bankers Association official calls the claims a bad joke as far as the Beehive State goes.
U.S. Public Interest Research Group (PIRG), a nonprofit consumer organization, updated an earlier survey of 271 banks in 25 states and the District of Columbia."The results of this survey are outrageous," said Michael Jones, PIRG's state campaign director. "The bankers still have their hands buried deep in our wallets. Bank fee increases once again defied gravity, rising at twice the inflation rate from our 1993 survey until 1995."
Jones said many "no-frills" checking or savings accounts actually cost fees or require deposits that keep low-income people from having bank accounts at all. Utah's regular checking accounts were among the fourth lowest in fees charged, but the state's banks charge the highest NOW account fees of the banks surveyed, he said.
Comparing survey results from 1993 to now, the report said:
- The annual cost for a regular checking account grew by 10 percent to $202 and monthly maintenance fees rose 22 percent percent to $7.11.
- The cost of low-frills checking accounts rose 6 percent to $144. The minimum balance to open these accounts rose 37 percent to $69.
- The cost to use ATM machines went up 6 percent to $1.01 for local networks and 7 percent to $1.18 for national networks.
"Banks have devised a three-part strategy to gouge consumers. They raise existing fees, invent new ones and make it harder to avoid fees, so more people pay more fees," Jones said.
He called upon Congress to stop rolling back bank regulations, suggested people use other resources such as credit unions, and urged creation of federal or state watchdog groups to supervise banks.
That's nonsense, responded W. David Hemingway, chairman of the Utah Bankers Association and executive vice president of Zions Bank.
"To say banks in Utah charge outrageous fees is a bad joke, especially relative to other parts of the country," Hemingway said. "There are a number of banks in Utah that offer totally free checking. I don't know how much cheaper you can get. There are no asterisks, no fine print - it's free and available to anyone who walks in."
Hemingway said he also knows of many Utah banks that offer free savings accounts to students, senior citizens, children and others who can't pay fees.
"I'm not aware of any bank in Utah that charges its customers to use an ATM. We do charge when our customers use another ATM because then we get charged or if a noncustomer uses our ATM. This allows us to put ATMs where there normally wouldn't be any. Right now, we're putting ATMs on the Navajo reservation."
Hemingway dismissed the idea of more government regulation as unnecessary and financially burdensome for consumers.
"The best form of regulation is competition and I assure you there's plenty of competition in Utah and that works," Hemingway said.