Local banks, credit unions benefit from anger over new fees at mega-banks
An ad on a MAT bus for State Bank & Trust encourages people to switch to their free checking Thursday in Fargo. Michael Vosburg / Forum Photo Editor
Gate City Bank ad
A man decorates trees in the parking lot of Gate City Bank in Fargo on Thursday below banners advertising free use of ATMs. Michael Vosburg / Forum Photo Editor FARGO - Kayla Hovland was worried about Bank of America's plan to charge customers $5 a month to use debit cards. To her, that fee - just scrapped - would have been a fee too far.
"You know that every other bank will want to start that as well," the Moorhead woman said Thursday. "I am sorry, but that is $60 a year that a bank will be taking from me. That is equivalent to a half-month's food for me."
Mike Lockwood of Elbow Lake, Minn., also had his fill of myriad banking fees.
"Every year it gets worse. If I treated my customers at my business this way, I would have no customers." he said.
There's confusion, too.
"I think it is insane what the banks can charge. Why is it some banks don't and some do?" asks Lorie Chastain, who works at a Fargo investment firm.
New or increasing fees at big banks have spawned a Facebook movement called Bank Transfer Day, which encourages people to move their banking to smaller banks and nonprofit credit unions beginning Saturday.
The growing backlash to attempts to add fees to debit card use has also forced some major banks to pull the plug on those fees.
Officials at area credit unions and banks that work without fees on checking accounts or debit cards say the fee-for-all at mega-banks pushes customers into their arms.
For instance, Gate City Bank and State Bank and Trust are among area banks that heavily advertise no-fee services.
Gate City has free checking (with a minimum balance), no monthly fee for debit cards and refunds all ATM fees, said Steve Swiontek, Gate City's chairman, president and CEO.
Gate City has refunded more than $6.5 million in ATM fees since 2006, Swiontek said, something unique in this part of the country.
"People are pretty sensitive about being assessed a fee to get money out of their own account when they use an ATM," he said.
Free checking also draws customers from big banks.
"This will be a record year for us in checking account openings," Swiontek said.
At State Bank and Trust in Fargo, board chairman and CEO Richard Solberg is adamant that checking remain free.
"A lot of banks are starting to charge fees. And we are choosing not to. It's working well for us. We're getting lots of new business," Solberg said.
"We're pleased with that. Our intentions are to go forward without charging fees for a long, long, long time," he said.
Jan Welch, manager of the downtown Fargo branch of United Savings Credit Union, says Bank Transfer Day has really been going on for six months, as she's seen two to three new customers a week from big banks.
"I would probably say I've heard more complaints about one or two of the big banks that we have locally here. More complaints in the last six months than I have in the last five years. People are just tired of it," Welch said.
"They're tired of feeling like they're just a way for the banks to make money. And everyone wants to feel special when they walk in the door, and that's what we try to do," Welch said.
Impersonal handling of business turns people off, agrees Nick Woodard, branch manager of Fargo's First Community Credit Union
"Here you're a member. We know you by name when you walk in the door. That type of small-town service that people are still looking for" is what a smaller institution can offer, Woodard said.
Not everyone believes the fees charged at some banks are meant to gouge customers.
Howard Harmon, an account executive at a Fargo firm, said the conveniences of modern banking have costs, too.
"Let's not forget, in order for the banks to offer many of the services we have grown to expect - like Internet banking, mobile banking, ATMs and debit cards - it costs the bank money and, like any other business, they have to cover these costs," Harmon said.
"As we expect more in services, it's fair to expect there may be fees. In addition, banks are one of the most regulated businesses in the US. The government has created many of these fees by dictating how the banks can generate income."