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Tuesday, January 27, 2009

Now, embattled banks are taking it in the service fees

I remember a few years back when there was still a First Chicago Bank when it was big news that they were considering a charge for the use of tellers. Now I know those aren't the only fees that bank customers are concerned about, however, we see evidence of where these various fees are getting banking consumers.

Tribune:
So some financial institutions are seeing dwindling levels of what's known in the industry as "non-interest income," which includes ATM, overdraft and other customer service fees.

An example: Amcore Financial Inc. last week reported that non-interest income was $16.9 million, off 7 percent from the fourth quarter of 2007 and down 16 percent from the third quarter of 2008.

One chief reason: "Service charges have declined as customers started to curtail spending during the quarter," Judith Sutfin, chief financial officer of the Rockford-based bank, said in a conference call.

Specifically, Amcore's revenue related to ATM fees and overdraft charges were down.

Fifth Third saw its deposit service charges fall in the fourth quarter, citing a falloff on lower transaction volumes and debit card usage.

"The economy is very weak, not just in credit, but where consumer spending is important, such as deposit service charges," Fifth Third Chief Executive Kevin Kabat said last week.
This is certainly the time for belt tightening. Also I'm sure man companies recognize that they may have to cater even more to the concerns of consumers. Perhaps that means some fees have to be either cut or eliminated altogether.

Of course for that to happen it has to be feasible. Then again I don't work at these banks only they know if it's feasible to cut fees or eliminate fees.

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