Land of the Fee
Checks and Balances

Overdraft protection used to be fee-free. That's changing, Chevy Chase Bank now has a $15 annual fee for accounts that automatically cover a check when there are insufficient funds available. Terry Cole, the bank's managing director, said the bank started charging the fee last year. "It's a great value for customers, a low-cost insurance" against bounced checks, Cold said. The alternative, she added, is a $32 fee for a bounced check, not to mention the cost of embarrassment.

--Caroline E. Mayer

Several points to make here:

1) Whenever you hear the word "value" come out of the mouth of a banker or policy person, hold on to your wallet and pay more attention, because you're about to be screwed. The word value has no meaning anymore. It's a vague term used to justify anti-consumer policy or technology.

2) Bigger banks charge more fees than small banks. According to the Federal Reserve's 2003 report to Congress on fees:

"Of the fourteen fees for which comparisons are available...multistate banks charged significantly higher fees in eight cases and in no case charged a significantly lower fee...Of the twenty-four measures that may be considered indicators of service availability, six changed a statistically significant amount, and five of these were in the direction of less service availability."