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Sandy Gives Banks Some Humanity

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Ever since the financial crisis four years ago, many ordinary Americans have felt like Wall Street banks took their bailout money and proceeded to continue operating their businesses as usual, taking advantage of opportunities to charge nickel-and-dime fees to their customers. Combined with stricter loan guidelines that prevented many people from getting financing when they most needed it, a large mass of people gave up on banks entirely, leading to movements like Bank Transfer Day and other anti-big-bank sentiment.

Yet while the worst recession in decades wasn't enough to make big banks relent in their pursuit of income, Hurricane Sandy apparently gave them pause. As a result, several banks have stepped up to make things easier for their customers during their current time of need, waiving much-hated fees in an effort to build goodwill and avoid resentment for fees that in many cases are entirely outside their customers' control at the moment.

Doing the right thing
Banks are stepping up with a number of initiatives that will give their customers at least some relief from the disruption that Hurricane Sandy has had on their lives. Here are just a few:

  • Most banks charge their customers when they use ATMs that are outside their proprietary network. But Citigroup (NYSE: C  ) , Wells Fargo (NYSE: WFC  ) , and TD Bank (NYSE: TD  ) are among institutions waiving out-of-network ATM fees for customers in areas affected by the storm.
  • Overdraft fees have gotten to be extremely expensive for customers who bounce checks. JPMorgan Chase (NYSE: JPM  ) is waiving overdraft fees as well as any charges associated with using overdraft protection services.
  • Late-payment fees for credit cards and consumer loans can not only be costly but can also have a negative impact on your credit. But Chase, Citi, and Wells Fargo are waiving those fees at least through Nov. 1.
  • Other banks, including Bank of America (NYSE: BAC  ) and Capital One, are addressing fee issues as they arise.

Good for them, good for us
All this sounds like the right thing for banks to do for their customers. But it's also good business for them.

Many major banks, especially those headquartered in New York City, are facing major internal disruptions at the moment. Banks with customer service call centers in areas affected by the storm are short-staffed at exactly the time when their customers will put the greatest demands on them. Many unusual situations will likely tax the ability of rank-and-file customer service representatives and their supervisors to address customer needs.

Given those challenges, the last thing that banks need is for customers to bombard them with calls about having minor fees waived. Yet that's exactly what many irate customers would likely do without the waivers, potentially creating yet another public relations disaster for banks at a critical time for the industry. By giving up a little fee income now, banks are saving themselves from a major headache down the road -- and perhaps building a little goodwill in the process.

Be smart with your accounts
Of course, just because banks are being kind with their policies doesn't mean you should count on them always to do the right thing. The best way to deal with fees is to avoid doing whatever it is that incurs them -- and if you can't, find a bank that won't charge you for that behavior. With many banks not only choosing not to charge fees for out-of-network ATMs but also refunding the fees that the ATM operators themselves often tack on, there's really no excuse for dinging yourself $3 to $5 each time you need to grab cash on the run.

With money as tight as it is right now, fees aren't something you can really afford to pay. Banks continue to rely on fees for a big chunk of their overall income, but with a little effort, you don't have to rely on their occasional benevolence in order to avoid paying fees yourself.

Bank of America has had its share of bad publicity, but it's still plugging away. Read our in-depth company report about the most-talked-about bank out there to learn whether Bank of America is a buy. The report details B of A's prospects, including three reasons to buy and three reasons to sell. Just click here to get access.

Tune in every Monday and Wednesday for Dan's columns on retirement, investing, and personal finance. You can follow him on Twitter @DanCaplinger.

Fool contributor Dan Caplinger owns warrants on Wells Fargo and JPMorgan Chase. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Motley Fool newsletter services recommend Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Dan Caplinger
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Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on Fool.com. With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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