PNC Bank, a major regional bank with 2,500 branches in 15 states, announced that it will no longer offer debit rewards and out-of-network ATM reimbursements on its free checking accounts, starting Sept. 12. Unlike some other big banks, though, PNC customers will still get free checking with no minimum balance.
"The key part of what PNC is doing is that it's retaining free checking," Ed Mierzwinski, consumer program director at watchdog group U.S. PIRG, tells WalletPop. "I think the core message here is that banks are going to try different things to try to provide value to their customers. This bank believes free checking provides value," he says. Accounts that carry a fee or a minimum balance requirement will continue to earn debit rewards.The bank is complaining about debit interchange fees; according to the Associated Press, the bank is saying that it will lose up to $400 million annually if a proposal by the Federal Reserve goes through. It would dramatically cut the interchange fees that banks charge merchants for debit card transactions
Now, before you feel sorry for PNC, here are a few things to keep in mind: The rule hasn't even gone into effect yet, so right now PNC -- along with the rest of the industry -- is losing nothing on debit card fees. Secondly, the Federal Reserve suggested several different fee structure revisions, and most economists expect them to go with one that impacts the banks least, at least initially.
So "up to" any amount of money is kind of misleading, because it's probable that the amount won't even come close to this doomsday scenario. As PIRG's Mierzwinski points out, debit rewards programs weren't created to give customers a boost; rather, they were developed as a way to incentivize the customer to conduct signature-based rather than PIN-based transactions, since banks make more money off the former.
Mierzwinski says that customers should keep this announcement in perspective, since the changes at PNC aren't as drastic and potentially problematic for consumers as those that have recently taken place at the nation's biggest banks. While the elimination of reimbursement for out-of-network ATM withdrawals may be problematic for customers who don't live near a PNC branch, those who live, work or worship near an affiliated ATM can still avoid fees, albeit with a bit more planning. In addition, PNC has lowered both the monthly maintenance fee and the minimum balance requirement on its higher-end checking accounts.
For consumers who don't like the bank's changes, though, there are always credit unions. According to research by Bankrate.com, 96% of credit unions still offer free checking accounts and their other account fees are lower than those at banks.
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