Small business owner Lucy Guilliano puts in a long week at her East Hartford, Connecticut, liquor store. Her profit margin is so slim she's feeling the pinch now that one bank has begun charging her to verify that a customer's check will clear.
"If I call once or twice before I can actually deposit the checks, it's going to cost me $3 to $6 which is probably the profit I made on the liquor I sold. So it isn't even worth it for me," says Guilliano.
"They said that if you were a Fleet account holder, you wouldn't be charged. So what are you saying? That I have to switch my money to Fleet bank now...so you can give me this information? That's ridiculous," says Guilliano.
Such tactics, coupled with more and rising bank fees, have outraged consumer activists. Fourteen million American families, they claim, cannot afford the simplest bank services, yet the fees, some 250 at last count, helped push industry earnings up in 1997 by more than 13 percent.
"Banks used to make money the old fashioned way, by earning it. Now they're making it by gouging customers with new and higher fees," says Ed Mierzwinski, a consumer advocate with a public interest research group,
"They're increasing bounced check fees. They're increasing late fees and inventing new late fees on credit cards," says Mierzwinski.
"Mortgage rates are at a bargain. The margin between the money we borrow and the money we lend has basically disappeared. So the old methods for banks to make money have all but disappeared," says Jim Schepker of Fleet Bank.
One fee has pushed opponents over the top.
Connecticut's attorney general has gone to court to halt a fee which he claims is actually illegal: a surcharge on non-customers using automated teller machines.
"The banks themselves encouraged consumers to use these ATM machines when they were free and now they are trying to double-charge for them," says Connecticut Attorney General Richard Blumenthal.
Fleet, Connecticut's largest bank, claims it is losing $15,000 every day it cannot collect a $1.50 surcharge whenever someone with an account at another bank gets cash from one of its machines.
"We have made an enormous investment in our ATMs for our customers. We think that it is appropriate that if non-customers want to use that service, they should pay for those services," contends Schepker.
Currently Connecticut is one of only two states t ban the ATM surcharge. In the most recent session, however, more than 25 state legislatures tried to enact a similar ban. They all failed.
"It's a machine spitting out money. It's not a person doing it. So that's the way I feel, I think it's wrong," says Jody Diaz.
Like her boss, liquor store clerk Jody Diaz now shops for banking as carefully as she shops for groceries. The big banks, she says, increasingly make her nervous.
"I think they're being greedy because it's like the more money they have the more money they want," says Diaz.
And that money has made the banking industry a formidable foe. Though other states, and even Congress, are closely watching Connecticut's battle over ATM surcharges, no one is willing to predict a winner.
Reported By Jacqueline Adams