PNC Bank Keeps Free Checking

The financial services company will not add fees to its basic checking accounts.

March 02, 2011

PITTSBURGH - PNC Financial Services Group Inc. will be keeping the free in free checking, eschewing a growing trend among banks to add fees for all types of checking accounts, the Wall Street Journal reports. But those no-fee accounts might face other changes, as PNC announces basic checking accounts will no longer have debit-card rewards and non-PNC ATM fees will not be reimbursable.

PNC is changing its checking accounts prior to the new federal law that limits what banks can assess retailers for debit-card payments, which the bank predicts could cost it $800 million annually. Other banks, including Bank of America and J.P. Morgan Chase have switched from offering free checking. Even smaller banks and credit unions, which usually have low-cost accounts, are looking into adding new fees.

Part of PNC??s motivation is its desire to snap up new customers who leave other banks. The financial company also would like to convert its current customers to accounts with fees, such as those that offer different services and products.

Customers have not exhibited much desire to switch banks because of fees. A new J.D. Power and Associates survey showed that while more customers are looking into new banks, fees don??t factor much into their decisions. But that could change as banks only started to charge new fees.

For PNC, with around 70 percent of its customers holding free checking accounts, "going from that to no free checking made no sense for us," said Joseph Guyaux, president of PNC. "What we don??t want to do in the short run is to punish our customers for something they didn't have any control over to start with."

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