Bailout

Egregious bank fee of the day, Banco Popular edition

By Felix Salmon

Commenter Engels has a bank account at Banco Popular. Checking his account online he found these weird charges:

The second charge, for $5, makes sense: if you look at the Banco Popular website, it says that there’s “a $5 monthly service charge if average monthly balance drops below $250″. But what on earth is “debit of ATM with flat fee”? There’s no schedule of fees on the website, and if you click on that line item to get a bit more detail, none is forthcoming:

Eventually Engels managed to get a human at Banco Popular on the phone, and they explained that from now on, Banco Popular will charge him $10 in every month he uses an outside ATM. And yes, that’s over and above any fees charged by the outside ATM itself.

Obviously, with overdraft fees waning, banks are going to look elsewhere for fee income. But $10 for using an outside ATM is, frankly, beyond the pale. And the opacity and sneakiness with which the fee was introduced and presented to Banco Popular’s clients only goes to show how much of a guilty conscience the bank has about imposing it.

Banco Popular is a bank for the working classes: many of its customers will have to work very hard for well over an hour to earn $10 of post-tax income, if they’re lucky enough to have a job at all. These aren’t people who withdraw $1200 at a time from their bank’s ATM: their cashflow doesn’t allow it. So even when they’re conscientious about avoiding the charges associated with outside ATMs, they might find themselves needing to use such services once a month or so. If they do, it’s downright cruel to slap them with this unexpected $10 charge.

I’d love to see a personal-finance website somewhere put together a list of various banks’ accounts and the fees associated with them; it would ideally include prepaid debit cards, too, and would archive historical information so that customers could see how the fees have evolved over time. The problem, of course, is getting the information: as we’ve seen with Banco Popular, banks are far from transparent about their fees. Maybe someone like Mint or Yodlee could do it?

Full post as published by Macroprudential on November 21, 2010 (boomark / email).