Since the Consumer Financial Protection Bureau (CFPB) started cracking down on “junk fees”  in 2022, a number of big banks have eliminated those fees altogether.

That was great news for consumers and it made wonderful headlines, but that is still the exception, not the rule.

This week, our focus is on not only which banks charge the most, but also which made the most improvement in the nine months ending March 31, 2024.

To Fee or Not to Fee, Where Does Your Bank Stand?

Since the Consumer Financial Protection Bureau (CFPB) started cracking down on “junk fees”  in 2022 (JRN 39:05), a number of big banks have eliminated those fees altogether. Today, well over 100 banks report that “Zero” income was coming from fees on domestic deposits.

By October 2023, the CFPB reported:

• Nearly two-thirds of banks with more than $10 billion in assets had eliminated overdraft (NSF) fees resulting in a 97% reduction in NSF revenue. And,
• Nearly three-quarters of the banks that earned the most in NSF revenue in 2021 had eliminated NSF fees.

That was great news for consumers and it made wonderful headlines, but there are still well over 4,000 banks that do charge such fees. Most of those charges are perfectly acceptable, but not all. The 50 that reported the highest (%) fee income, relative to transaction and savings deposits, can be found on page 5.

3-Star Vermont State Bank, IL, a $24 million asset bank that topped the list last year (JRN 40:42) has eliminated almost all of its service charges on deposit accounts. At March 31, 2024 it reported just $2,000, bringing its service fees as a percent of transaction and savings deposits all the way to .09%. Kudos.

However, with a few exceptions,  the other top “fee-chargers” last October are in similar positions on the list today. Notable exceptions include the following three, which showed the most impressive improvement:

5-Star First Security Bank & Trust Co., Oklahoma City, OK

Total deposits at First Security B&T, a minority depository institution (MDI), increased by about 19% during  the nine month period since we last reported on bank fee income, yet transaction and savings deposits increased less than 4%.

That, combined with a 75% decrease in fee income, brought this bank down from the #30 spot last year to #239, and well off of this year’s list. Its fee income as a percent of transaction and savings deposits was cut in half—from 1.11% to just 0.54% during that time-frame.

The following two had similar results and are also worth acknowledging. First, 5-Star Citizens Progressive Bank, Winnsboro, LA, cut its fee income by more than half in the  nine-month period. As a result, it went from the #33 spot down to #104. Its fee income to transaction and savings deposit ratio dropped from 1.06% down to 0.39%.

And, with a 67% reduction in fee income and a stable denominator, the, 3½-Star G.W. Jones Exchange Bank, Marcellus, MI went from the #29 spot to #111. Its ratio of fees as a percent of transaction and savings account deposits dropped from 1.13% to 0.73%, since we last  reported in October 2023.

Now, the not so good news. Back in 2021, Northern California National Bank, Chico, CA, was (somewhat quietly) purchased by a local family, the Hockeys. (William Hockey, CEO, was one of the co-founders of Plaid, a well-known financial infrastructure company.)

Without much fanfare, the new owners also changed the name of the bank. It was not until 2022, however, that it began using the new name, 4-Star Column National Association, along with a new website.

It is important to mention it did not abandon its old moniker. Column N.A. still operates as Northern California NB (NorCal) and maintains the old website as well. It now has a dual identity, a community bank and Column.

Column N.A. is geared specifically towards builders and developers. In fact. it doesn’t look much like a bank at all, and that’s how the Hockeys want it. However, during this  transition, we also saw another shift.

At March 31, 2022 Column N.A. had total deposits of $346.1 million, of which $326.879 million were transaction and savings (T&SD). Service fees on deposit accounts were minimal, just 0.02% of T&SD. Today, after the reorganization, those fees represent 1.63% of T&SD! That’s quite a jump.

Often, when a community bank wants to grow beyond its namesake town’s borders, it will change  the name of the bank to something more broad. That was the case for Bank of Soperton, GA, which, similar to NorCal, also had a name change in 2022. The newly minted 5-Star Georgia First Bank, Soperton, GA has since spread outside of Soperton and into neighboring Dublin and Vidalia, GA.

In the 12 months ending March 31, 2024, Georgia First Bank attracted about $30 million in new deposits, while is T&SD dropped by about $14 million. An 80% increase in fees on deposits caused its ratio to jump from 0.5% to 1.03% and onto page 5.

And let us not forget our military-centric banks. One that has perpetually been on this list is 5-Star Armed Forces Bank, N.A., Fort Leavenworth, KS. We are pleased to report that, while still high at 1.16% of T&SD deposit,  the bank is making steady progress in reducing fees. At this same time last year, Armed Forces Bank reported deposit fees of 1.21% of T&SD and the two previous years they were 1.37% and 1.67%, respectively.

While the 1.16% is still high, we are watching  and cheering on Armed Forces Bank. Its improvement brings it lower on page 5 each time we generate this report.