Big Banks, Bigger Fees

Executive Summary

More than 12 million American families can't afford bank accounts. The rest of us are paying too much, especially if we bank at big banks. Meanwhile, in 2000 banks recorded nearly $72 billion in profits, narrowly missing a tenth straight year of new record profits. According to the Federal Deposit Insurance Corporation (FDIC), deposit account and ATM surcharge fee income are important parts of those increased profits.

This 2001 national survey, prepared by the state PIRGs with assistance from state and local member groups of the Consumer Federation of America (CFA), updates our 1993, 1995, 1997 and 1999 national surveys.1 The disturbing trend of more, and higher, fees is continuing. Data from 2001 are compared on a state-by-state basis and to 1999 national averages.

Since bank deregulation began in the early 1980s, the PIRGs and other consumer groups have conducted numerous studies documenting skyrocketing consumer banking fees. Our studies have helped to focus national attention on the problem of skyrocketing bank fees. Our results are substantiated by the results of the Federal Reserve Board's annual fee reports to Congress. 2

In 2001, our findings show that the cost spread, or "big bank fee gap," between big banks and small banks continues to widen. In 2001, the best deal, for consumers who qualify for membership, is still at member-owned credit unions. Others can find lower fees at small, locally-owned community banks.

On the positive side, this year's study finds more banks, even some big banks in some markets, offering free checking accounts. On the negative side, in addition to the fee increases, we note profoundly disturbing trends in the availability of bank fee information that helps consumers shop around and allows researchers to investigate fee trends. PIRG is sending letters to bank regulators describing the difficulties we are having obtaining bank brochures and understanding bank fee descriptions. If we are having difficulty shopping around, so are consumers.

1 See the PIRG reports “Big Banks, Bigger Fees 1999,” and "Big Banks, Bigger Fees: The 1997 PIRG National Bank Survey of 419 Banks in 30 States" at Also see the print reports "Banks Think Fees, Not Free: The 1995 PIRG Bank Fee Survey of 271 Banks In 26 States," by U.S. PIRG and Janice Shields, August 1995, and "Crushing Consumers: The 1993 PIRG/CFA National Survey of 300 Banks In 23 States", jointly written by U.S. PIRG, the Consumer Federation of America and Janice Shields, Ph.D. Also see PIRG's series of annual reports on rising ATM surcharges, most recently, "Double ATM Fees, Triple Trouble,” March 2001, available at PIRG’s ATM fee website

2 Our results are similar to data from numerous government, consultant and industry data on bank costs and fees for consumer deposit accounts. See discussion below o Federal Reserve studies. The author talks on a regular basis to investigative reporters who conduct their own local surveys, with confirming results.

The California Public Interest Research Group Education Fund (CALPIRG)  is a result-oriented public interest group that protects consumers, encourages a fair sustainable economy, and fosters responsive democratic governance.

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