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Banks fail to squeeze us for fees

By Claes Bell, CFA · Bankrate.com
Wednesday, March 6, 2013
Posted: 6 pm ET

Every quarter, the Federal Deposit Insurance Corp. releases a bunch of data collected from the banks it insures. Here are some of the takeaways for consumers found in the latest data dump.

  • Bank choice continues to die a slow death. While there are still thousands of banks in the U.S., the number of FDIC-insured banks hasn't risen since the first quarter of 1986. Since then, the number of banks in the U.S. has declined by more than 60 percent.
  • Banks are paying a lot less interest to customers. Since the same quarter last year, the amount of interest paid out on U.S. deposits has fallen by about 20 percent. Some of that may be due in part to more savers "Lemon-ing," though.
  • More banks appear to be on a solid financial footing than last year. The number of banks failing to make a profit has declined by a third since the same time last year.
  • Bank customers seem to be doing a decent job fighting off fees. Bank service fee income actually fell since the same time last year, declining a half of a percent year-over-year.
  • More people are paying their bills. The amount of money written off as uncollectable by banks, known as "chargeoffs," declined by 12 percent.

Obviously, the picture here is mixed. It's not great news that bank customers are missing out on interest on their deposits, and that customer choice when it comes to banking is declining in many areas.

But it's interesting that even with the well-publicized decline of free checking, banks haven't been able to substantially increase the amount of fee income they squeeze out of customers.

What do you think? Do you notice fewer choices when shopping for a bank? Are you paying more or less than you were in bank fees last year?

Follow me on Twitter: @ClaesBell.

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