Overdraft fees have been scrutinized, and federal legislation has been passed to keep bank charges in check. Now Rep. Deborah Fellela, D-Johnston, is looking to address another bank fee and procedures that she says are unfair to consumers. She had submitted legislation to prohibit banks from charging noncustomers fees to cash checks, particularly if the checks are issued from the same bank. She also wants to outlaw some bank practices of fingerprinting those noncustomers.
PBN: How widespread is the practice of charging noncustomers fees to cash checks, even when the checks are issued from the same bank?
FELLELA: It seems to be very wide spread. I know that Citizens Bank and Bank of America have these two practices in place.
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PBN: Have you introduced similar bills in previous sessions? Was there any particular reason you’ve submitted the legislation now?
FELLELA: No, I haven’t introduced similar legislation, however, as I campaigned over the summer it was brought to my attention.
When I heard about the procedure at Bank of America, I decided to follow up on the calls I received. So, yes, I was fingerprinted, and it was embarrassing with everyone around. You do feel invaded. I asked the teller and she said it was their procedure. I said I have a Bank of America check, my license and I have other ID. But still I needed to place my thumbprint on the front of the check, to cash my state of Rhode Island check.
PBN: What has been the reaction from the banking community?
FELLELA: We did have our committee hearing [recently] in the House Corporations Committee. The Rhode Island Bankers Association is not in favor. More or less, he said the fees are basically there because of so much fraud. Checks can be duplicated and licenses are easy to duplicate, he said, and they feel [the people cashing the checks without an account] are not their customers. But as a committee member mentioned, that really isn’t the case. Example: I give my babysitter a check for $25 she tries to cash it at that bank [where the check is from], and has to pay a fee of $7. I still owe her money. So it really does affect the customer, as well.
PBN: The news release about your legislation mentions that fingerprinting had been done by Bank of America in New Hampshire, but there legislation in that state to prohibit the practice. What happened there?
FELLELA: In New Hampshire, [Bank of America] stopped it on their own as legislation was pending in the House.
[Rhode Island ACLU Director] Steve Brown was at the [recent Corporations Committee hearing] in favor of the bill. He said the fingerprinting is an unfair practice.
PBN: How much support does this legislation have in the General Assembly?
FELLELA: I did get a good vibe from the committee hearing that most of the members thought it to be a good piece of legislation. I plan speak to Corporations Committee Chairman [Rep. Brian] Kennedy to see how to proceed forward.
How about the consumer going to a bank that doesn’t do stupid things? That is how small banks grow — by out competing the big banks.
As we all know, the private sector does a far, far better job creating and delivering services than government. Who in his right mind wants pols setting fees for private sector services? The whole national financial sector mess was due primarily to pols (like Barney Frank, Chris Dodd and Maxine Waters) messing with market forces.
I really don’t want to hear much from RI’s pols until they solve the budget mess that they—they—created.