Survey finds small banks, credit unions lead way in free checking

Bank of America is testing higher checking account fees in three states, a survey by a consumer group notes.
(Paul Sakuma / Associated Press)

Free checking is available at more than 6 out of 10 small banks and credit unions but at only a quarter of banks with more than $10 billion in deposits, according to a new survey from the U.S. Public Interest Research Group.

The consumer group also said that fewer than half of the 250 bank branches it visited in 17 states provided full disclosure of their fees on first request, as banks are legally required to do under the Truth in Savings Act of 1991.

About 12% of the banks never complied and refused to provide fee information, claiming that they didn’t have it, or told researchers to “go online,” the U.S. PIRG report said.


When the consumer group examined disclosures about fees at the websites of 330 banks in 24 states and the District of Columbia, it found that full fee disclosure information was “often hard to find” online and available at only 62% of big banks surveyed and just 29% of small banks.

“The Truth in Savings Act is a simple law that helps consumers shop around,” said Ed Mierzwinski, the report’s author. “But compliance with it is poor, harming consumers who cannot learn the truth.”

The survey found that nearly 60% of the big banks offered free checking with a regular direct deposit. But it said many were edging toward higher charges, with Bank of America, the largest retail bank, test-marketing higher-fee accounts in three states.

The researchers said 63% of small banks and 60% of credit unions provided totally free checking. The survey found that, compared with big banks, small banks had lower average checking account fees, overdraft fees and fees for use of other banks’ ATMs, as well as lower balance requirements to avoid checking fees.

The group urged consumers to vote with their feet when they found that bank fees were too high.

“Free checking is still there for consumers who look for it and there are lots of ways to avoid high bank fees,” Mierzwinski said.


Bank fees rise to record highs

At many big banks, no more free checking

Banks simplifying checking account disclosures