Some of the larger banks that serve Inland Northwest customers are adding monthly service charges to their personal checking account packages. Bank officials say it's an effort to make up for losses in revenue due to current economic conditions, rising overhead costs, and possible changes to some federal banking regulations.

Meanwhile, executives at a couple of Inland Northwest-based banks who were interviewed say those institutions aren't adding any new fees, and they hope to keep their checking accounts free of service charges for as long as they can.

Two big national banks with multiple branches here—Wells Fargo & Co. and U.S. Bancorp—recently began charging fees for personal checking accounts.

Steve Wilcox, the Spokane district manager for U.S. Bank, says that late last month the bank tacked on monthly service charges to its personal checking accounts, ranging from $6.95 to $19.95 a month, depending on the account package and if the account holder receives online or mailed paper statements.

"Banks are evaluating their cost structures like any other business would from time to time, and we are doing this as many other institutions are," Wilcox says. "You have to evaluate your marketplace and the outside influences to make it a profitable business, and banks are a business just the same. Fees will evolve on an ongoing basis."

The lowest fees, associated with U.S. Bank's Silver Checking Package and its Easy Checking Account, are $6.95 a month for paperless statements or $8.95 a month for mailed statements, Wilcox says. The bank has five different personal checking options that now all have fees.

Wilcox adds that U.S. Bank hasn't made any recent changes to its business checking accounts' fee structures.

Wells Fargo also has plans to add fees to its personal checking accounts, says Boise-based regional spokeswoman Amy McDevitt.

"There are a lot of operational expenses in banking, so it's paying for the service being provided," McDevitt says.

Starting in September, Wells Fargo will add a $5 per month online-statement fee or a $7 per month mailed statement fee to some of its basic checking accounts, McDevitt says.

"Our goal is to set a fair price to be consistent with the value of our products and services," she says.

Yet, even though the banks plan to or already have rolled out new fees, McDevitt and Wilcox say there are several steps customers can take to avoid paying them.

The monthly fees can be waived at both Wells Fargo and U.S. Bank if a customer maintains at least one of the following: a minimum balance of $1,500, a minimum $25 automatic monthly transfer between accounts, or a cumulative minimum total of $500 in direct deposits, they say.

Other big national banks with a sizable presence here, Bank of America and JPMorgan Chase & Co., also have said they have added or soon will start adding similar fees, says a recent article in The Wall Street Journal.

One of the main concerns of big banks is a measure being proposed by the Federal Reserve that could cap the amount they can charge merchants for debit card transactions. Though at this time it's still unclear as to whether that measure will be enacted into law, the proposal could limit those fees to a maximum of seven to 12 cents per transaction, versus the current average of 44 cents, the Wall Street Journal reported.

McDevitt and Wilcox both assert, though, that the new fees at Wells Fargo and U.S. Bank aren't a direct result of that proposal, stemming rather from standard reassessments of the banks' products and services.

Says McDevitt, "At Wells Fargo, we continually evaluate our products and services, taking into account the needs of customers, the economy, and the regulatory environment. The changes are being made in response to the economic and regulatory environment."

At least for now, community banks in the Spokane area that were contacted say they'll continue to maintain free personal checking accounts.

Lorilei Bruggink, executive vice president at Spokane Valley-based State Bank Northwest, says, "We made a conscientious decision to not raise our fees during these tough economic times, and that is how we've tried to help our customers."

Bruggink adds that the bank's niche of mostly small-business customers means that its accounts tend to carry higher balances. She estimates that about 70 percent of all its accounts are commercial.

In comparison to its national-bank competitors here, Bruggink says, "We're not as retail oriented as bigger banks, so we are still able to offer customers free checking, though a lot going forward will depend on new regulatory environments."

She adds that State Bank Northwest continues to monitor the proposed debit-card transaction fee reduction, though the bank would look at increasing fees for services that cost it more to offer before potentially tacking charges onto personal consumer accounts. Such higher-cost services include overdrafts, stop payments, and other types of transactions that aren't processed automatically, she says.

Washington Trust Bank plans to continue offering a free checking account option for both personal and business customers, but early last month it increased its overdraft fee by $2, says Mike Shellenberger, senior vice president of commercial retail product strategy.

Washington Trust's other checking account packages do have fees tied to them, depending on the services included, and whether the customer meets certain requirements such as maintaining a specified minimum monthly balance, he adds.

"We've always had a free checking option and the intent is to continue offering that as a product," Schellenberger says.

He adds that Washington Trust also continues to watch the regulatory debit card transaction proposal, though if it were to be enacted, he says the bank could be exempt because its assets are under $10 billion.

Yet, he says there's always a possibility that Washington Trust might have to add service fees in the future, depending on other regulatory or economic factors. He says that for now, the bank will continue to avoid implementing service charges in an effort to maintain a competitive edge over banks here that have added such fees to their accounts.

"One of the niches for community banks is maintaining the product line for small businesses and consumers, and one key product is a free checking product," Shellenberger says.

State Bank Northwest's assets, at around $100 million, obviously fall far below the $10 billion threshold, as do the asset levels of all but a small group of the banks that do business here. Bruggink says, though, that the recent debate on the proposed measure suggests that smaller banks might not be exempted from it, due to potential processing-related complications.

She says that if banks under $10 billion in assets were to be exempt, all debit card transaction processing systems would have to be set up to recognize if a debit card's funds were coming from an institution that was above or below that mark, and thus what amount to charge the merchant for the transaction.

"The debate is still out on whether or not they'll do that," Bruggink says. "Although the rule says we'd be exempt, in practice we're not seeing that's going to happen because it would require two different processing environments."

Spokane-based AmericanWest Bank also says it doesn't have plans to increase or add any new fees to any of its checking account products and services.

"That's the last thing we want to do," says Kelly McPhee, AmericanWest spokeswoman. "We service local businesses and people in our region, so we aren't going to increase fees or change prices unless we have to."

McPhee says, though, that community banks have been hit hard by the recession and that while adding fees could help improve profitability, not charging customers is a crucial element of the business model community banks follow.

"It's simply the right thing to do," she says.