Tuesday, January 19, 1999
Check-cashing fees take hold
Fifth Third starts Feb. 15
BY JEFF McKINNEY
The Cincinnati Enquirer
Three of Greater Cincinnati's seven largest banks have quietly begun — or will soon begin — charging non-customers fees ranging from $3 to $5 to cash checks, even if the checks are backed by the banks.
Fifth Third, Cincinnati's largest bank with about 50,000 business customers, will begin to levy the fee Feb. 15.
Fifth Third will charge non-customers $5 to cash personal or payroll checks, even if the checks are drawn on the bank and the check's issuer does business at the bank.
Fifth Third joins PNC and Bank One, which charge for such check-cashing services. Firstar Corp., parent of Star Bank, and Key Bank, Provident and Huntington don't charge to cash checks written on accounts at their institutions.
Several consumer advo cates, already angry with rising bank fees for services that were once free, are unhappy with more banks charging fees to cash checks.
“This is outrageous,” said Morris Williams, a Cincinnati community activist. “This is a step to force low-income, hard-working people to use direct deposit, get a checking account or use a credit card instead of a check so they can do business at a bank.”
Consumer advocates say the fees mostly will affect poor people who can't afford or can barely afford to have banking services such as checking accounts that would enable them to cash checks.
Bankers contend that the fees are not designed to penalize low- or moderate-income individuals.
Instead, they say the fees will deter non-customers from overloading their branches, help them recruit new customers or make non-customers pay for convenience, and reduce check fraud.
Will Daly, vice president of retail banking at Fifth Third, said non-customers can avoid the fee by opening an account with the bank. He said Fifth Third will pay $50 to customers who open an account and offer other perks.
“We don't believe there's a huge number of people who will be impacted by this,” Mr. Daly said. “We will offer them incentives to bank with us or they can cash their checks where they bank.”
As recently as two years ago, most of the Tristate's largest banks did not charge individuals to cash checks, even if the checks were written on an account at another institution.
That changed last January when Provident, the city's second-largest bank, quietly imposed a $5 fee for non-customers to cash checks not drawn on the bank. PNC and Bank One imposed a $3 fee for non-account holders last spring.
And Huntington, which had a $2 fee, in November raised the fee to $7 for non-customers to cash a non-Huntington check.
Provident and Huntington do not charge fees for checks drawn on accounts at their banks.
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