Smaller banks pledge not to impose debit-card fees
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It’s an appealing come-on following BofA’s decision to charge customers $5 a month to swipe the cards -- even for bankers who say new Federal Reserve regulations have unfairly capped what they can charge merchants for accepting the cards.
‘Given the state of the economy and the political environment, we think it’s the wrong time to pass that cost on to our clients,’ City National Chief Executive Russell Goldsmith said in an interview.
Depositors ‘want to be valued as a customer,’ PacTrust Chief Executive Gregory Mitchell said. ‘This seems to be a forgotten principle among the major banks.’
Forswearing the debit-card charge is easier for banks and credit unions with less than $10 billion in assets, such as PacTrust, since they are exempt from the new limits on the allowable fees charged to merchants who accept debit cards. City National Bank, with $22 billion in assets, gets no such pass.
Bank of America representatives said consumers should compare all costs plus factors such as ATM availability before deciding where to bank.
Citibank, for example, has said it won’t impose a fee for debit-card use, but it charges $10 a month for a basic checking account unless customers have $1,500 in deposits or they sign up for certain automatic deposit and bill-payment services.
PacTrust is expanding beyond its base in San Diego and Riverside counties into Los Angeles and Orange counties and is looking to pick up new customers. It offers a basic checking account that is free with no minimum deposit.
City National says customers can avoid checking account fees by keeping an average of $3,500 on deposit.
Bank of America customers can avoid the debit-card charges by using them only at ATMs and not for purchases, by having a Bank of America home loan, or by having $20,000 on deposit.
[For the record, 12 p.m. Thursday, Oct. 13: An earlier version of this story reported incorrectly that Citibank charges $20 a month for a basic checking account; the monthly fee is $10.]
--E. Scott Reckard