SAN BERNARDINO, Calif.-Big banks are now holding the line on free checking.

After a steep decline in the percentage of free checking accounts, 38% of checking accounts offered by major banks are free, down just one percentage point from last year, according to's 2013 Checking Survey

Compare that to between 2009 and 2012, when free checking at banks declined from 76% of checking accounts to 39%.

"We spanked the banks a bit with all the 'dump your bank' promotions and I think they found out they are not invincible," said Gregg Stockdale, CEO of the $35 million-asset 1st Valley CU here. "They said, 'Let's see if we can get away with charging customers for checking accounts,' and now it appears to be Plan B."

1st Valley has always held to the philosophy that free checking is a business builder. The credit union offers a totally free checking account and another that pays interest but charges a small fee if members' balances drop below a certain limit. Stockdale said that 99% of the CU's checking balances reside in the free account.


Checking Still Primary

"I don't care which way you cut it, checking is still the primary account," said Stockdale. "I don't think checking needs to be a money maker because of all the other business the product brings in, and 50% of our members have our checking account-good penetration."

Scott Wilson, CEO of the $464 million SeaComm FCU in Massena, N.Y., said that consumer education has much to do with banks stopping their free checking free fall. "Consumers are learning they have more options, of which credit unions are one. They are asking, 'Why should I pay to have access to my own money?' "

CUs have benefitted from the anti-bank sentiment that has been generated following Bank Transfer Day, recording record membership growth and strong checking increases. Wilson pointed out that SeaComm has seen 20% annual membership increases in recent years.

Wilson and Stockdale noted that while they wouldn't mind if banks continued to chop away at their free checking offerings, big banks' practice of hiking fees related to checking-such as overdraft and ATM-may continue to drive more checking business toward the CU community.

Bank checking fees hit a record high according to's survey:

The average fee to maintain a checking account rose from $5.48 to $5.54 per month.

Bank overdraft fees now average of $32.20-up almost $1 over last year's average of $31.26.

ATM fees hit an all-time high-banks now charge noncustomers an average of $2.60 to use their ATMs, up from $2.50 last year. The average fee banks charge for going out of network is down a few percentage points from last year, to $1.53, but combined, customers pay a total of $4.13 to make a withdrawal at an out-of-network ATM.

"It's clear that if banks hang onto free checking they will make up the money somewhere else," said Wilson.

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