Most banks either lowered fees or kept them steady last year, according to a study the Federal Reserve Board sent Congress Thursday.

Of 39 fees analyzed, the Fed said 40% were lowered in 1997 and 50% were virtually unchanged. The results are a reversal of last year's survey, in which the Fed found most banks increased fees.

The primary exceptions were ATM surcharges. The number of banks imposing fees on noncustomers who use their ATM machines increased 15.3 percentage points, to 60.1% in 1997. The average surcharge was $1.14, virtually the same as the average fee charged in 1996.

"There are three reasons for this," said Jim Chessen, chief economist at the American Bankers Association. "It is competition, competition, competition. There are 30,000 providers of financial services in this country, and they are all competing to serve the customer. That means banks have to deliver good products at good prices."

But a consumer advocate said he was not impressed by the results. "The fact that fees are slightly down from their peak doesn't mean that we still don't have a problem," said Gary Klein, an attorney at the National Consumer Law Center.

Overall, ATM fees fell in 1997.

The Fed found that 67% of banks charged their customers for making withdrawals at another bank's ATM; 55.2% charged for checking balances. Those are down 12.8 percentage points and 9.5 percentage points, respectively. The average fees for withdrawals and balance inquiries were $1.06 and 99 cents, respectively. Those are both down 4 cents from last year, the Fed found.

The average fee for overdrafts dropped to $15.73, down 55 cents. Fees for stop-payment orders and bounced checks were virtually unchanged.

Multistate banks charged more than community banks in 12 of the 19 fees the Fed compared. For the remaining seven fees, both types of institutions charged identical amounts.

The average stop-payment order cost $13.32 at community banks, $4.58 less than at big banks. Also lower were bounced check and overdraft fees.

"This is an ongoing trend," said Kenneth A. Guenther, executive vice president at the Independent Bankers Association of America. "It underscores the fact that the merger wave sweeping through the financial services industry is not consumer-friendly. You can get better service and better fees at community banks."

Large banks, however, did require lower minimum balances for all types of NOW accounts, simple passbook savings accounts, and no-fee savings accounts.

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