First Chicago Bank’s $3 Fee for Teller Use Draws Fire

Angered by First Chicago Bank’s decision to charge consumers $3 to do their banking with a teller, consumer groups and some Democrats on Capitol Hill are threatening a backlash.

On Wednesday, Rep. Maxine Waters (D-Los Angeles) said she might organize a boycott against the bank, which announced the fees last week as a means of encouraging lower-cost usage of automated teller machines.

Waters is calling on the bank to voluntarily rescind the $3 fee or face the wrath of consumer groups that she vows to mobilize.

“I was disturbed and disgusted when I first learned of First Chicago’s newest effort to gouge customers. This effort to squeeze more money from bank customers is an outrage,” Waters said at a news conference at the Capitol. She also plans to reintroduce legislation that freezes bank fees for two years.

First Chicago had no comment Wednesday on Waters’ remarks.

Waters and consumer advocates say such fees are unfair to low-income customers, who cannot maintain the high account balances that obviate the teller charges, and the elderly, who are less likely to use ATMs to do their banking.

“Maxine Waters is absolutely on the right side on this,” said Edmund Mierzwinski, a spokesman for the U.S. Public Interest Research Group in Washington. “I have condemned this as unfair to senior citizens. They hate ATMs. If the banks want us to use ATMs, give us a carrot. Don’t hit us over the head with a stick.”

Many banks are trying to move away from teller transactions because they are more expensive to perform than ATM transactions.

In California, accounts that emphasize ATM usage over teller visits have been offered in recent years, said Dominick Albano, a spokeswoman for the California Bankers Assn.

“I wish we could say we foresaw the consumers’ growing interest in ATM accounts,” she said, “but we developed these products in response to strong customer demand. We had to play catch-up.”

Bank of America and Wells Fargo, both based in San Francisco, offer discounts on monthly checking account fees to customers who agree to use ATMs or telephone banking services instead of tellers. If customers enrolled in such programs use a teller, a $2 fee is charged.

Although ATM banking is growing in popularity with customers and is preferred by many banks for its cost savings and efficiency, the thought of requiring a fee to have human contact with a teller has scared most banks away from promoting the idea.

“There are very few out there that have taken the First Chicago approach,” said Virginia Stafford, a spokeswoman for the American Banking Assn. in Washington. “But consumers will ultimately determine if this catches on. Some banks will focus on electronic banking; some will focus on tellers.”

The banking association has taken no official position on the fees.

The new fee structure of First Chicago allows customers to choose from four accounts with different minimum balances and limitations. But three of the account programs allow only four teller visits a month. After that, each face-to-face encounter with a teller costs $3. If customers have direct deposit of paychecks, six teller transactions a month are allowed.

Customers who maintain a $2,500 checking account balance or a combined balance of $15,000 in savings, checking and other accounts are allowed unlimited teller service.