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Some banks send bailout bills to biz customers
NEW YORK (7/31/09)--Here's yet another opportunity for credit unions to attract members fed up with banks' fees. Some banks are passing the cost of their bailout insurance assessments along to some of their business customers. In May, the Federal Deposit Insurance Corp. (FDIC) assessed the nation's banks $5.6 billion to restock its insurance fund after costly bank failures, reported Dow Jones News Service (July 29). Such costs are not passed along by credit unions to their members, said Bill Hampel, chief economist at the Credit Union National Association. "To my knowledge, credit unions do NOT pass on their share insurance costs to any specific group of members," he told News Now. Dow Jones noted that JPMorgan Chase & Co. paid $675 million out of second-quarter earnings and Wells Fargo & Co. paid $565 million. "But those two banks, along with many others, are passing their FDIC bills to some business customers," the article said. Both banks confirmed to Dow Jones that they are passing along the FDIC fees to some business customers, including some small businesses. A Wells Fargo spokesman said the fees affect business customers that account for a very small portion of its total deposit customer base. Cincinnati-based Fifth Third Bancorp said it began passing its $55 million special assessment costs along to commercial customers in March. Other banks, such as Bank of America Corp., KeyCorp., SunTrust Banks Inc., BB&T Corp. and Capital One Financial Corp., could not verify whether they charge fees to offset the assessment. The article said line-item details of the fees aren't readily visible and usually are found in "account analysis" or invoice documents, not on the account's statement. It also noted banks levy the charges in a variety of ways, including basing fees on average account balance and fixed fees that mirror a bank's assessment costs. Since banks likely will see even more assessments due to failures' impact on the FDIC insurance fund, the article said.
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