Just when you thought it was safe, Bank of America and other large, national banks, are still finding ways to charge customers new fees. Only a few months ago, word of a new $5 monthly fee for debit card users sent Bank of America customers into a frenzy, threatening to move money away from the financial giant. Bank Transfer Day was largely a success, despite the complicated process of switching banks in today’s automated banking environment.

Hundreds of thousands of customers enrolled in credit unions, smaller organizations that are generally more consumer- and community-friendly than national institutions. Fees like Bank of America’s $5 debit card fee hit mainstream news outlets, bringing personal finance into the consciousness of the public once again. Bank of America eventually dropped its proposal for the new fee, but the bank didn’t stop looking for more methods of extracting funds out of its customers.

For the last generation, customers have grown accustomed to free or mostly-free checking and savings. These are considered deposit accounts. Depositing your money with a bank is more beneficial for the bank than for the customer. Doing business with a bank does the company a favor. The institutions should be paying customers for the banks’ benefit of holding the customers’ money. Sometimes banks do pay consumers, through interest on savings accounts, which as most people know have been at pathetic rates for the last few years.

With money on deposit, banks can go out and offer loans to businesses and individuals, earning money on the interest charged on those loans. That’s where banks should make money from their customers. Savings and checking customers are doing banks a favor.

Lately, the problem has been that banks aren’t making as much money from lending as they had previously, and shareholders demand consistently growing profits. That pressure results in even more fees. And banks are now counting on the fact that last year’s outrage has subsided, and the public is now willing to live with the idea that basic banking is not free. Additionally, it’s fair to say that the cost for a bank to manage checking and savings accounts may have increased, due to research and development into technology to provide all the banking conveniences (online access, mobile apps, person-to-person payments, etc.) that consumers have come to expect, although one could argue the lowered reliance on tellers and live customer services representatives should offset that cost.

Furthermore, the latest round of fees are designed to hurt lower income households more than those with higher net worth amounts. It’s been true in investing for a while that the better rates and lower fees are available to those with higher balances. This is due to the attempt to convince customers to invest as much money as possible with any one particular institution or brokerage. The same is true with fees; the more money you have, the more leverage you have to demand lower costs for the services you buy.

This leaves low-income families in a tough spot. If you can’t maintain a minimum balance in your checking account, a monthly fee will reduce that low balance even further, possibly even below zero, so you end up owing money to the bank or the bank decides to close your account. While the balance minimums encourage customers to leave more of their money with one institution, not all customers have more money to deposit.

Here are a few recent examples of how the latest round of new fees from big banks penalize those without the means to deposit more.

• Some Wells Fargo customers have been subject to a new $15 monthly fee if unable to maintain a $7,500 balance. And they’ve recently changed policies to prevent customers from suing the bank or being part of a class-action lawsuit.
• Citibank increased its minimum balance to avoid a $20 monthly fee from $6,000 to $15,000.
• Bank of America is testing new monthly fees of $6 to $25 in three states (Arizona, Georgia and Massachusetts).

At the same time, an informal poll of fans of Consumerism Commentary on Facebook and followers on Twitter indicates most engaged Consumerism Commentary readers, who generally earn more than the average internet user according to basic demographic research, pay nothing for their checking account, though some are still subject to a minimum balance or enrolling in direct deposit to avoid a fee. Finding free checking is still possible, especially with credit unions, but non-students still need to occasionally jump through hoops with major banks.

New regulations are often cited by the financial industry as the trigger for punishing low-income customers for handing their money to banks for safekeeping and lending. Others see these new fees as a way for banks to increase profits while using regulation as a convenient scapegoat. Of course, opinions on the matter are generally divided along political party lines as well as between industry lobbyists and consumer advocacy groups.

Low-income families might continue to avoid the banking industry, which may be the unstated goal of financial institutions in the first place. Unfortunately, that leaves little choice for low socio-economic status communities other than turning to non-bank financial products, like expensive payday loans and check cashing services. Not only do these communities need better financial role models (education alone will never solve the financial literacy problem), but they need to be guided toward better products and services.

There’s a real market opportunity for better products and services, for smart entrepreneurs who are looking to make a difference. In the mean time, here’s how to close your Bank of America savings or checking account when walking into the branch won’t work for you.

Photo: MoneyBlogNewz
KVAL / AP

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Almost ten years ago, the government passed a law that made electronic images of paper checks just as legitimate as the paper checks themselves. As banks implemented the law, it saved time and money by allowing banks of first deposit to scan checks after a customers deposit them for verification with the originating bank. With an image of a check being accepted in place of a paper check, more banks have begun implementing a convenience to customers as well.

Businesses were the first customers to receive these benefits. For a business that receives thousands of checks every day, bringing the physical paper checks to a branch for deposit can be an expensive and time-consuming process, fraught with the possibility of security problems with the checks in transit. Banks have offered business the option of remote deposit. With this service, the customer can scan checks using a specialized imagine device (check scanner) and transmit the images securely over the Internet or a private network connection. The funds are then available immediately rather than overnight.

With this success, banks are in the process of extended similar features to non-business customers. With the proliferation of cell phones with built-in, high-megapixel camera, banks can now offer deposits using snapshots of checks sent via text message or custom smartphone apps. For these customers, no bulky desktop scanner is necessary, and there’s no need to be home to make the deposit. You can effectively deposit checks from your mailbox down the street or from your grandmother’s house on your birthday.

Business customers still have the advantages, with very few banks actively offering this service to non-business customers. The number of banks offering this service to consumers is increasing, however.

Remote deposit is most useful for banks that don’t have local branches, like these online banks. ING Direct, still bloggers’ most favorite bank, is working to implement remote check deposit soon, but with the bank’s planned acquisition by Capital One it’s unclear when new features will be added. ING Direct recently began offering paper checks to customers, so remote deposit capture may not be too far behind.

Chase Bank offers apps for iOS and Android devices. The application allows customers to log into their bank accounts. To deposit a check, take a picture of the front and back, and send the images securely to Chase using the application. The deposit will be recorded as pending immediately, though availability will depend on the bank’s typical schedule, usually next business day availability for local checks. The availability schedule has several variables, though, so always check with the bank to determine when the funds you deposit will be available.

Ally Bank has offered remote deposit for customers since April 2011, but the bank has just recently opened the program to all customers. Ally’s eCheck Deposit service requires a scanner and some manual work, such as inputting the check amount (shouldn’t this be automatically read when scanned?) and aligning the images. Ally plans to offer a mobile application soon.

The USAA Bank mobile application for iOS, Android, and Windows Phone 7 includes a feature allowing remote deposit. Deposit@Mobile requires the customer to enter the check amount, take one photo of the front of the check and one photo of the back, and submit the images to the bank through the application. The bank will confirm the deposit amount.

Have you used your bank’s remote deposit service? If so, what did you think of the experience?

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