PIRG: ATM DEBIT CARDS
FOR IMMEDIATE RELEASE, MONDAY 13 April 98
CONTACT: Ed Mierzwinski, 202-546-9707
BIGGER BANKS MEANS BIGGER FEES
Statement of the U.S. Public Interest Research Group on the announced mergers of Bank of America with Nationsbank and First Chicago with Bank One
ãBigger banks means bigger fees. Both PIRG and Federal Reserve bank fee studies have confirmed that bigger banks use monopoly muscle to charge their customers higher fees than small banks and credit unions do. These mergers will result in less consumer choice and less competition-- that means higher fees for consumers. PIRG is appalled that to date, both the Department of Justice and the Federal Reserve have rubber-stamped every financial merger they have seen -- perhaps this pile of mergers will wake them up. It is time to review the adequacy of the banking laws to see whether the modest restrictions to prevent monopoly are adequate. Bigger banks consistently charging higher fees says they are not.
Nationsbank and Bank of America have a history of charging some of the highest consumer account fees in the country. First Chicago popularized the outrageous human teller fee and Bank One is one of the few banks that surcharges its own customers. How can these mergers possibly be pro-consumer?
The announcements are hot on the heels of the proposed Citibank/Travelers merger -- which would create a ãone-stop financial supermarket" where captive customers would not only pay higher fees, but might be encouraged to buy unsuitable investment products and unnecessary add-on products while facing potential privacy invasions as various affiliates shared their customer profiles, perhaps inappropriately and certainly without informed consent.
PIRG's 1997 study of deposit account fees at over 400 banks found a 15% fee gap between high cost big banks and low cost small banks; credit union fees were half those of big banks. PIRG's 1998 ATM surcharging report found that more big banks surcharge non-customers and big bank surcharges were higher. So were the fees big banks charged their own customers to use other owners' ATMs.
Instead of merging, these big banks ought to start competing, the way small banks and credit unions do, by lowering their fees.
U.S. PIRG is the national lobbying office for state Public Interest Research Groups. PIRGs are non-profit, non-partisan consumer and environmental advocacy groups with offices around the country. See http://www.pirg.org/consumer/ for more information.
©1999 Public Interest Research Groups