When First National Bank of Chicago introduced $3 teller charges on some transactions this year, community bankers helped turn the policy into a public relations nightmare.
First Chicago, which meanwhile has retreated somewhat on applying the fees, insisted that in fact in was only following the pack. "Every community bank out there is charging you a teller fee," a spokeswoman said. "They're calling it something else."
But even in the first quarter, before it imposed the $3 teller fee, only 10 of the area's 200-plus banks charged more in service fees than First Chicago per $100 of deposits.
In fact, First Chicago raked in nearly three times the area average - 28.9 cents versus 11.2 cents - according to an American Banker analysis of data provided by Sheshunoff Information Services.
Community banks walk a fine line when it comes to service charges. Excessive ones can drive customers away, but "unless you can find a way to make your customers more profitable to you ... it's going to be more difficult to compete," said Gregory P. Anderson, an analyst at the Chicago Corp.
Some Chicago-area community banks, in fact, had been raking in service charges faster than First Chicago.
Foster Bank had the highest average in the area, 45.7 cents per $100 of deposits.
North Community Bank was second-highest, at 45.2 cents. Scott Yelvington, president, said his institution collects fees from numerous commercial customers whose transaction volume is high but whose balances often are not.
The $135 million-asset bank also collects from users of its substantial automated teller machine network who don't bank there.
On retail accounts, "our service charges on a per-charge basis are very competitive, and not out of the ordinary at all," Mr. Yelvington said.
Nevetherless, many community banks that lambasted First Chicago's teller fee decision seem to be practicing what they preached.
Service charges at Midcity National Bank, one of many community banks that ran advertising to capitalize on First Chicago's bad press, averaged only 5.3 cents per $100 of deposits.
Bank of Elmhurst, a two-year-old institution that advertised free tellers, charged just 3.8 cents on average
And Lake Forest Bank and Trust, which for a time paid customers for visiting its tellers, had the 15th-lowest service charges among the banks examined, at 2.1 cents.
Community Savings Bank had the lowest charges - one-tenth of a cent per $100 of deposits.
Frank Stromberg, vice president and controller, said that the $300 million-asset bank has few service charges because it doesn't want to hit up its many longtime customers - and can't pick and choose in order to charge new customers.
"I guess we're a little like the U.S. criminal justice system," Mr. Stromberg said. "We'll let everybody go, just so no innocent person gets hurt.
Jonathan D. Epstein contributed to this article.
