Large Banks Charge Much Bigger Fees, Fed Survey Shows

America’s largest banks, which operate in several states, charge significantly more for their services than smaller banks that do business in only one state, the Federal Reserve said Wednesday.

The Fed’s annual survey of fees imposed by banks and by savings and loans also found that the number of banks offering free checking account services dropped to 10.8% in 1999, compared with 17.3% in 1998.

The number of savings and loans with free checking account services rose last year to 30%, compared with 23.4% in 1998.

Overall, the latest annual survey showed that the discrepancy in fees between big and small banks continued in 1999.

For example, the average bounced-check fee at a single-state bank was $17.04, compared with $21.80 charged by big banks, according to the survey.

Small banks charged on average $14.50 for a stop-payment order, compared with $20.10 for big banks, the central bank found.

The survey, based on checks with 1,000 financial institutions, also showed that more banks are offering a minimum-balance account, in which consumers pay a flat monthly fee as long as their balance remains above a certain amount.

The survey found 40.6% of banks offering such accounts, compared with 35.6% in 1998. The average monthly charge dropped last year by 28 cents to $6.15, compared with $6.43 in 1998.

The latest report will be the Fed’s final survey on bank fees unless Congress passes legislation to reauthorize the annual review.

Consumer advocates said the disparity underscored the need for legislative oversight.

“The report continues to show that bigger banks continue to charge bigger fees,” said Edmund Mierzwinski, consumer program director for U.S. Public Interest Research Group.

Banking industry officials defended the more prevalent fees as a way to hold down basic charges.

John Hall, a spokesman for the American Bankers Assn., said a survey the ABA did last month showed that 59% of bank customers pay $3 or less for monthly bank services.