BEING ROBBED BY THE BANKS; CALIFORNIANS PAY STIFF PRICE FOR SERVICES.

Byline: Chris Sieroty Staff Writer

When it comes to bank service fees, consumers in California pay a high price for the convenience of automated teller machines and regular checking accounts, according to a survey released Thursday.

California consumers are paying $202.39 to maintain a regular checking account, slightly lower than the national average of $217.32 but still 15.4 percent more than the $175.43 paid by consumers in Nebraska, the Washington-based U.S. Public Interest Research Group said in its latest annual national survey of bank fees in 33 states and the District of Columbia.

Californians also are forced to maintain some of the highest average balance requirements to avoid fees, with a required minimum balance averaging $811 for checking accounts, ranking California 33rd out of 34 states.

Among the 526 banks surveyed, California's ranking of 12 different cost factors is collectively a below-average 25th overall, said Janine Benner, a consumer advocate with the California Public Interest Research Group. Those costs include checking account monthly fees, ATM fees, bounced check fees, minimum balance requirements and the number of banks offering free checking.

Bank industry officials were quick to criticize the survey, saying the fictitious examples didn't reflect reality.

``The survey is flawed because of the way it was calculated. They used a fake customer who over-used bank services,'' said John Stafford, a spokesman with the California Bankers Association. ``Most consumers avoid bank fees by balancing their check book, using their own banks' ATMs, not bouncing checks, and generally knowing what services their bank charges fees for and avoiding them.''

Added Sharon Woodson-Bryant, a spokeswoman with Union Bank of California: ``We don't feel the scenario presented in the survey represents the average consumer.''

Stafford disputed the annual fees for Californians, calling them ``absolute nonsense.'' Consumer fees in California represent less than 7 percent of bank revenues, he said.

Benner defended the survey by saying the fees were taken from the banks' own brochures.

CalPIRG hopes the survey will encourage consumers to shop around for a bank, Benner said. ``We want them to choose a bank that charges them the least amount of money.''

The report ``Big Banks, Big Fees,'' found that in California, only 11 percent of banks surveyed offered either free checking without any restrictions or free checking with direct deposit, ranking the state 28th out of 34.

Nationally, the survey found the states with the lowest banking costs for consumers were Nebraska, followed by Missouri, Utah, Colorado and Arkansas. The highest cost states were New York, Florida, Texas, Michigan and North Carolina.

The survey also found:

Almost 12 million American families can't afford bank accounts.

Ninety-two banks out of 526, or 17 percent, offered free checking accounts, with no fees and no restrictions, other than no return of canceled checks. By comparison, 45 percent of credit unions offer free checking without restrictions.

The average cost to maintain a checking account at credit unions was $111.59, or less than half what big banks charge.

Bank customers paid on average $23.08 in 1999 for bouncing checks, up 10 percent from 1997, when customers paid only $20.91; $5.12 in 1999 for receiving someone else's bounced check, up from $4.87 in 1997; and ATM surcharges imposed on other banks' customers averaged $1.35 this year.

The USPIRG survey comes as California becomes the center of attention nationwide over ATM fees charged by local banks.

Earlier this week, the Santa Monica City Council gave final approval to an ordinance that will outlaw the practice of charging double fees at ATMs. Barring any legal actions, the new ordinance will take effect Nov. 11, said City Clerk Maria Stewart.

The California Bankers Association has not filed suit against Santa Monica, but, Stafford said, ``We are preparing legal action.''

The measure would bar banks from charging fees for use of their ATMs by non-customers. It would not affect the power of banks to charge fees to their own customers who use other banks' ATMs.

``The banks' practice of double-dipping charges at ATMs is anti-consumer and anti-competitive. Consumer choice doesn't work here because people cannot avoid high ATM fees,'' said Santa Monica City Councilman Kevin McKeown in a statement. ``We hope that other local governments will enact similar consumer protections.''

Next month, residents in San Francisco will vote on Proposition F, a ballot measure to prohibit ATM charges. CalPIRG supports the measure, Benner said.

Nearly a dozen other California cities and counties will also be considering ATM fee ordinances in the coming months, she said.

In Los Angeles, the City Council unanimously approved a measure Wednesday instructing City Attorney James K. Hahn to draft an ordinance similar to the measure that passed in Santa Monica.

``We will help and encourage other cities, counties and the state to pass similar ordinances,'' Benner said.