Wells Fargo latest to expand checking account fees
March 09, 2012
Last week, Bank of America made headlines for its plans to charge service fees of up to $25 per month on some checking accounts. Now, Wells Fargo appears poised to roll out a new fee structure for some of its deposit accounts.
CNN Money reports that the new fees come amid a push from the bank to eliminate all free checking accounts. Meanwhile, the company's top financial officer told investors the bank may be closing some branches in the near future.
Fees launched in six more states
Wells Fargo stopped offering free checking to new customers in 2010, but the bank has been slowly transitioning its existing customers toward more checking account fees as well. According to the CNN Money report, some existing customers in western states were assessed the $7 monthly fee beginning last year, but effective May 4, customers in six more states will be subject to the fee:
- New Jersey
- New York
The $7 fee will be applied to Wells Fargo Essential checking accounts and will appear on June statements. Customers can avoid the fee by maintaining a $1,500 minimum daily balance or by making direct deposits of at least $500 monthly. In addition, a $2 discount off the fee will be given to those opting to receive online statements instead of paper ones.
Investors told branches may be closing
Meanwhile, a Bloomberg Businessweek report indicates some Wells Fargo branches may be closing. The bank's Chief Financial Officer, Timothy Sloan, is said to have told investors at a New York conference that the days of some offices may be numbered. Branches too close to another location may be shuttered or wealth-management and mortgage services may be consolidated in those offices.
It isn't the first time Wells Fargo has closed offices. In 2010, it eliminated 638 branches when it shut down its Wells Fargo Financial unit. The current announcement is part of an effort to cut costs as new federal regulations regarding swipes fees and overdraft services threaten to cut into bank profits. CEO John Stumpf has announced plans to reduce quarterly costs by $1.5 billion by the end of the year.
While Wells Fargo may be closing some branches, a company spokesperson told Bloomberg that the changes are meant to increase efficiency and not reduce the bank's retail presence. As the nation's leading in terms of market share, Wells Fargo operated 6,239 retail branches, 1,375 retail brokerage offices and 725 mortgage locations as of the end of 2011.