Wells Fargo announced yesterday the bank is implementing new checking account fees in several states.
This is the latest in a series of moves banks have been making in order to recoup some of the losses created by new credit card regulations.
According to several media sources, Wells Fargo said going forward customers in six states will now have to pay a $7-a-month fee to maintain a checking account.
CNN Money reported Wells Fargo had stopped offering free checking accounts to new customers (primarily in Western states), and later added existing customers to this requirement. Now existing customers in the states of Georgia, New Jersey, Delaware, Connecticut, New York and Pennsylvania will also be slapped with the monthly fee on their Essential Checking accounts.
Customers can avoid the fee by doing a couple of things; they can maintain a minimum daily balance of $1,500 or have $500 or more in direct deposits arriving in the account each month. Additionally, Wells Fargo said it will be giving a $2 discount on the fee to those customers who opt to skip paper statements and use the online statements only.
Wells Fargo has branches in 39 states and Washington D.C. At this time no announcement has been made about imposing the $7-a-month fee on customers in other regions of the U.S., but it sounds as if this is in the works.
The bank said in a statement to CBS Miami, after the network inquired about Florida residents, "Although we are communicating to customers in these 6 states now, the fees will not be assessed until June. Regarding your question about Florida, we plan to eventually introduce the fee for Essential Checking across the bank and, as always, will communicate first with customers well in advance of any change affecting them.”
This is further confirmed by Bloomberg in its report on the new fees. In an email to Bloomberg, Lisa Westermann, a Wells Fargo spokeswoman, said, “We’re rolling it out region by region. We plan to roll it out through all the regions eventually.”
“Free checking essentially went away in 2010,” Westermann said. “As time evolved, we have been introducing fees into other accounts, with a number of waivers for customers.”
Customers immediately affected by the change can expect to see the new fee appear on their June statement, if they do not meet the two requirements that would waive the fee.
Since new regulation has capped the amount banks can charge merchants through the Durbin Amendment, banks have been exploring ways to pass on those losses, and one of those targets is consumers.
Consumers are not responding positively to many of these changes, and in fall 2011 Wells Fargo announced they were dropping the pilot debit card fee they'd been exploring. The Bank of America also had dumped their fee for debit cards after customers balked at this increase and many said they were discontinuing using BofA.
This doesn't stop banks from trying though. Wells Fargo's announcement comes on the heels of Bank of America recently stating they too are tacking on additional checking account fees.
Whether or not customers begin to jump ship and go to other banks remains to be seen, however if past reactions are any indicator, they might just do that.