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Big banks move away from free checking

By Crystal Price
EL PASO, Texas -- It is costing more to keep money in the bank these days -- as fewer large banks offer free checking.

According to Bankrate.com, only 38 percent of banks offer free checking accounts with no strings attached. That is down from the 65 percent of banks that offered the services for free in 2010.

For instance, many banks require customers have a minimum account balance, make consistent deposits, or meet a certain number of debit card transactions.

The American Bankers Association said the new trend follows Congress's' decision to cut the income that helps pay for checking account services.

"It costs about $300 per year for a bank to offer checking account services," said Nessa Feddis, senior vice president and deputy chief counsel for consumer protection and payment for the American Banker's Association (ABA). "There are a lot of costs involved and they have to be recovered."

However, this does not impact credit unions like GECU.

GECU officials said they have not stopped offering free checking services.

"Our focus is not for profit, but to help people," said Alex Rascon, assistant vice president of regional branching for GECU. "That's why we're able to offer our products without service fees."

Rascon said GECU has seen an influx in people opening checking accounts in recent years.

"We have some that have moved over from other financial institutions because of fees that have started incurring," Rascon said.

Rascon said the credit union plans to continue offering free checking with no strings attached.

Estela Escobar from west El Paso is a former business woman with three checking accounts with GECU.

Escobar said free checking is an important thing to her when it comes to banking.

"It helps me save," Escobar said. "I have quite a bit of savings with three of them."

According to ABA, a majority of consumers do not pay for checking at larger banks because they comply with their bank's free checking requirements.