Saturday, August 26, 2006
Jay Gustafson, in an unfamiliar town for a job hunt and in need of some fast cash, gritted his teeth and hit the nearest ATM.
"For $20, I paid $25," Gustafson said, bemoaning the fees levied by the bank that ran the machine and by his own bank for using someone else's machine.
Millions of Americans do the same thing every day, to the tune of an estimated $4.24 billion in ATM fees this year. But at a time when more banks are charging non-customers more money to use their ATMs, some consumers are getting a break.
Many credit unions and smaller banks are joining surcharge-free ATM networks to make up for not having large networks of their own to compete with national banks.
And one big bank, U.S. Bank, a part of Minneapolis-based U.S. Bancorp, expanded its network by buying the MoneyPass surcharge-free ATM network, giving its customers free access to 10,000 ATMs in 48 states, including 5,000 U.S. Bank-owned machines.
"We're in a constant dog-eat-dog fight for market share," said Rick Hartnack, U.S. Bank's vice chairman and head of consumer banking.
Greg McBride, senior financial analyst with Bankrate.com, said U.S. Bank's move "goes against the grain" of what other big banks are doing.
"This is a move to differentiate themselves from their primary competitors that have very large ATM networks themselves," McBride said.
Bankrate.com projects that consumers will pay $4.2 billion in ATM fees this year, a slight dip from $4.3 billion last year, but McBride said the overall trend is upward.
The financial Web site's latest semiannual survey found that ATM surcharges have soared more than 20 percent in the past two years. The fees banks charged to non-account holders averaged $1.60 this spring, up from $1.32 two years ago, and 98 percent of banks that own ATMs now charge fees to non-account holders, up from 89 percent two years ago.
One major bank that had bucked that trend gave up last fall. Seattle-based Washington Mutual Inc., the nation's largest savings and loan, in November dropped its long-standing practice of allowing non-customers to use its ATMs for free, citing long lines that made access harder for its own customers.
Bankrate.com said Washington Mutual was largely responsible for the rise in banks charging fees to non-account holders in its latest survey, as well as a drop in banks that charge their customers for using other banks' ATMs.
Bankrate.com said fees imposed by banks on their own customers for using other banks' machines fell to $1.29 from $1.37 since last fall, and the number of banks imposing such charges fell to 81 percent from 89 percent a year ago.
Gary Townsend, an analyst with Friedman, Billings, Ramsey & Co., said most banks see charging fees to non-customers as a "no-brainer," an easy way to make money off them. But he said he sees a "distinct trend" of smaller banks offering their customers breaks on ATM fees to compete against the big institutions.
Banks that do offer such deals or ATM fee rebates on at least some accounts include Cherry Hill, N.J.-based Commerce Bank, Milwaukee-based M&I Marshall & Ilsley Bank, and Green Bay, Wis.-based Associated Bank. Conditions such as minimum balances often apply.
"Consumers seriously consider the size of a financial institution's ATM network when they decide where to go," said Jan Estep, president of Genpass Inc., owner of the MoneyPass network, which U.S. Bank bought last year.
MoneyPass has about 600 other participants, including financial institutions as well as state governments that use MoneyPass cards to distribute benefits electronically. Altogether, Estep said, MoneyPass now has about 21 million cardholders.
Bigger banks already have a competitive advantage from their large ATM networks, McBride said. Charlotte, N.C.-based Bank of America Corp. has the largest among the bank-owned networks at nearly 17,000 ATMs nationwide. San Francisco-based Wells Fargo & Co. owns 6,500 machines in 23 states.
But the country's largest surcharge-free ATM network is Allpoint Network, which has 32,000 machines in all 50 states. All of them are in retailers such as Target and Costco discount stores, and CVS and Walgreens pharmacies.
Allpoint's participants are mostly credit unions and smaller banks, said Ben Psillas, president of the Bethesda, Md.-based network. Those institutions can then woo customers with the promise of 32,000 free ATMs, he said.
As he stood in line for a Wells Fargo ATM in downtown Minneapolis, Gustafson, of Sioux Falls, S.D., said he can usually find one of his own bank's machines when he needs cash.
But Gustafson didn't know the neighborhood when he needed cash at a popular pub the night before, so he paid the price for the convenience of using the bar's ATM. That price broke down to $2.95 just for using the bar's ATM, and then his bank -- Wells Fargo -- charged him another $2.
Sunday, August 13, 2006
After saturating the market in Annapolis and much of the rest of Anne Arundel, banks are now targeting west county for growth, a trend experts say will continue as thousands of jobs move to Fort George G. Meade.
The Columbia Bank and BankAnnapolis are just two of the community banks that have new branches in the works, and their regional and national competitors are laying similar plans.
"We are anxious to get in there as soon as we can," said John Bond, president and CEO The Columbia Bank. "We've already benefited from that whole phenomenon of growth in the market, and we expect to benefit further."
The Howard County bank will open its first Anne Arundel branch next year at Arundel Preserve, a 270-acre mixed development in Hanover. The project includes 1.6 million square feet of office space.
While finding the right location will limit some expansion, officials with several banks already active in the county said they are eyeing the area around Fort Meade, Odenton, Hanover and Gambrills for expansion.
"Anne Arundel is getting a lot more attention," said David Danielson, a Virginia-based banking consultant. "They've saturated their own market. They are going for the next one. Anne Arundel is like the next frontier."
Considered a banking hotbed already, Anne Arundel is currently home to 31 financial institutions with 165 offices and a combined $6.7 million in deposits, according to a 2005 Federal Deposit Insurance Corp. report.
More than a dozen banks already have a total of 21 branches in the western portion of the county. By comparison, there are 44 bank branches in the Annapolis area.
The draw in west county is primarily the thousands of workers expected to relocate there in the next five to 10 years as the Pentagon moves thousands of jobs to Fort Meade and expands the National Security Agency. Both moves are
Sara Lifshin, spokesman for the Maryland Bankers Association, said the area is extremely attractive as a market for mortgages and loans to small-to-medium sized government contractors.
BankAnnapolis will open its eighth branch in Odenton next year at the corner of Route 175 and Town Center Boulevard. It opened its seventh branch at Market House in Annapolis last week.
"The expansion of Fort Meade is going to bring a lot of residences and a lot of ancillary businesses to the area," said Lori Mueller, senior vice president for marketing and customer service at the Annapolis-based bank. "It really is going to be the next hotbed in Anne Arundel, and we want to be apart of it."
CommerceFirst, a 3-year-old bank that targets the business community, recently opened branches in Glen Burnie and Columbia. Also based in Annapolis, it is looking for a west county branch.
"No question," said Rick Morgan, president and chief executive officer. "We'll be looking to expand into the Crofton-Odenton area. It's a no-brainer from what I see. I've known for a long time the west was an area where we were going to target growth."
It's not just community banks moving to capitalize on west county growth. With 10 branches already in the county, Wachovia opened a new location in Hanover last year. Bank spokesman Christine Shaw said it is "exceeding our expectations."
"We love the Anne Arundel market," she said. "We are looking to expand in it, but we don't have any leases as of yet. We look at growth, patterns, and demographics. If (the west is) where the growth is, that's where we want to be."
It's the same story for M&T Bank's Chesapeake Division, which counts a Hanover branch among its 14 county locations.
"We're actively pursuing that market," said Nicholas Lambrow, president of the division. "There's a lot of opportunity in west county. We do well over there. That whole area is going to continue to grow."
The stampede westward has even prompted at least one group of financial entrepreneurs to begin work on forming a new bank.
Marcia Ryan, assistant commissioner for the state's office of financial regulation, said her agency is in discussions with the group but declined to name them.
"We have a group that has expressed interest in a possible charter application for that area," she said. "Right now we're in the very preliminary discussions."
Friday, August 04, 2006
Bank customers in Wisconsin now can write checks that reflect more of their team loyalties.
Associated Bank in July unveiled its latest sports sponsorship, Milwaukee Brewers Checking. The baseball-themed checking account follows a similar program with the Green Bay Packers and Wisconsin Badgers.
Associated has offered Packers Checking for years, and started the Badgers program last year.
Team sponsorship "is one way to bring awareness of our services to a targeted group of people," said Paul Beideman, president and chief executive officer of Associated Banc-Corp, the parent of Associated Bank.
The teams, too, see advantages in partnering with banks.
"We certainly derive a benefit to have our mark on their checks," said Jason Hartlund, director of corporate marketing with the Brewers. "And they view us as a valuable outlet to get their name out in southeastern Wisconsin. We're happy to be associated with Associated."
Known in the banking industry as affinity marketing, the accounts feature the logo of a favorite group or a sports team on checks and check cards. Affinity marketing was pioneered by MBNA in 1983, when it offered a credit card in partnership with Georgetown University. The idea took off nationwide.
Banks pay the teams to participate.
Consumers like affinity cards because they are tied to something they feel strongly about. Industry officials like affinity card users because they tend to carry larger balances, pay bills more promptly and keep the same card longer.
Banks often offer customers — and the fans — rewards for using the cards.
Associated card users are eligible for perks that include discounts at the Packers Pro Shop at Lambeau Field and Fan Zone at Miller Park.
For Associated, the sponsorships also include signs and advertising at the stadiums.
Associated sees the relationships with Wisconsin sports teams as a way to separate it from competitors.
"Many of our customers say the sports-themed checking account is a top reason they bank with us," Beideman said. Packers Checking, for example, has been popular and now has 85,000 customers statewide, he said.
Associated also pledged to donate $10 for each Brewers Checking account — for a minimum $5,000 donation — to help the Felix Mantilla Little League in Milwaukee.
Ricardo Diaz, executive director of Milwaukee's United Community Center, which oversees the Little League, said Associated has been a partner for years on many endeavors.
"It will be a great contribution and help tremendously. These dollars will be used to buy uniforms, upgrade our field and purchase equipment for the kids," Diaz said. In the past, Associated staffers also helped as volunteers through the United Way.
