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Buffalo-area banks are continuing to increase the fees on their accounts, a new survey shows.

The New York Public Interest Research Group's study, entitled "Shopping Smart for Banks in the Buffalo Area," focuses on 11 banks and thrifts that do business in the region.

Much like NYPIRG's August 1996 study, the new report shows that, on a year-to-year comparison, many banks are raising fees for various checking and savings accounts, and for using automated teller machines.

"Banking consumers are getting hammered by bank fees," said Blair Horner, NYPIRG's legislative director. "Our guide shows that consumers could needlessly be paying hundreds of dollars in bank fees."

Banks love fee income, which is contributing an
ever-higher percentage of their profits. Few financial institutions today are reporting sizable gains in loan making, but fees are pouring in from such things as missed minimum account balances, to mortgage fees, to investment account service charges.

"Bank fees are stiff and multitudinous throughout America," said Robert Heady, publisher of Bank Rate Monitor in North Palm Beach, Fla.

Based on its 1997 survey, NYPIRG selects the best and the worst from its 11-institution field:

On regular, non-interest-bearing checking accounts, the Bank of Holland is a winner, charging a flat $2 fee with no balance restrictions.

NYPIRG urges consumers to beware of regular checking accounts at Chase Manhattan, Citibank, Fleet Bank and Marine Midland, which mandate a $1,000 minimum balance to avoid monthly fees of $6 or $7.

On so-called basic banking or low-cost checking accounts, which are mandated by state law to provide no-interest checking at a flat or low fee, the Bank of Holland and M&T Bank are looking good so long as you perform one transaction per month. The Holland institution does, however, charge 20 cents per transaction.

Institutions one would tend to avoid for basic banking would include Lockport Savings Bank, which charges a flat $5 monthly regardless of how many transactions are performed; Chase, which charges $4 per month plus 25 cents per transaction for all transactions over 10 if the account balance is below $1,000; Key Bank, which charges a $4 monthly fee plus 50 cents per check over the 10 allotted; and Fleet, $3 per monthly plus 75 cents over the eight checks allotted.

For savings accounts, check out the Bank of Holland, which sets no minimum to earn interest or to open an account and charges no monthly fee.

At the opposite end, Fleet has a minimum $50 to open an account, a $500 balance to avoid a $3 monthly charge, but no minimum balance requirement to earn interest.

Citibank also appears to be no bargain for savings-account customers, according to NYPIRG's survey. While you can open an account with any amount and earn interest on any balance, you must maintain a $500 balance to avoid a fee, which is $5 monthly.

To help ease the sting of bank fees, NYPIRG offers a number of suggestions, including:

Shop around for a financial institution.

Get all of the facts on fees. Don't just look at glossy, four-color brochures.

Pick a bank that levies fees based on your average -- not lowest -- monthly balance. This can make a big difference.

Limit the use of ATMS not controlled by your financial institution. ATM surcharges can mean another $1.50 per transaction.

"Consumers need to look at four or five banks and match their fees against the consumer's individual banking needs," said Bank Rate Monitor's Heady.

NYPIRG's assessment on the state of bank fees is not pretty. "Generally, the survey shows bad news for consumers," Horner said. "And the future looks grim as big banks gobble up little banks. Little banks have the lower fees and charges."

Horner said the only bright spot on the banking horizon depends on which way the U.S. Supreme Court looks at the nation's credit union industry. If credit unions are allowed to broaden their customer base, it could help reduce fees since, Horner said, credit union fees typically are about half those charged even by small banks.

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