With consumers seething over the growing reality of paying to swipe a debit card, local credit unions and banks have seen a spike in inquiries about their products and services.
In response to Bank of America's announcement that it plans to charge customers $5 per month to use their debit cards, Bank of Tucson launched a radio advertisement Friday.
The ad slams big national banks for making consumers dependent on debit cards, then charging them when the use becomes a habit.
"I don't know about you but I use my debit card a lot; buy a sandwich; fill up with gas; get the dog vaccinated for rabies; whatever," the narrator says in the ad. "So you have a couple of other choices, I guess. Write checks - lots of places won't accept them and it kills trees - or you could carry cash, lots and lots of cash. That's safe - not."
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The ad closes by saying Bank of Tucson will never charge its customers to use debit cards.
Most Tucson financial institutions offer free checking accounts that include debit cards at no extra cost. What's more, representatives say, they have no plans to start adding fees.
Bank of America executives argue the new fee is necessary to make up for revenue lost because of federal regulations that limit the amount banks can collect from retailers in debit-card swipe fees.
Other banks, including Wells Fargo and Chase, have begun testing similar fees in certain markets.
Bank of America CEO Brian Moynihan defended the added cost to consumers, saying banks have the right to make a profit for their shareholders, CNNMoney reported this week.
That's an argument you won't be hearing any time soon from local credit unions.
"One of the big differentiators between a credit union and a bank is our customers own us," said Joseph Mirachi, the president and CEO of Tucson Old Pueblo Credit Union. "We don't have outside stockholders. We're more concerned with just generating value for our members."
Tucson Old Pueblo even has a checking account, called the nickel-back checking account, that pays customers 5 cents every time they use their debit card. That account, introduced in March 2010, has become increasingly popular with both new and existing members, Mirachi said.
Bank of Tucson isn't owned by its members, but its president and CEO Michael Hannley said it doesn't make sense for it to charge customers who use debit cards. Most of the bank's income comes from the loans it makes, and as a community bank it doesn't have enough customers to make a substantial amount of cash by charging debit card fees, he said.
Bank of Tucson's free checking account has a minimum monthly balance of $500, though that can be supplemented with other account balances.
Potential new customers have called and visited the local bank since word spread of Bank of America's plan to charge for debit cards, Hannley said.
Local credit unions have seen a similar influx of frustrated customers looking to avoid bank fees.
At Pyramid Federal Credit Union new accounts opened in September jumped 30 percent from the previous month, said President and CEO Raymond Lancaster.
Matthew Gaspari, senior vice president at Tucson Federal Credit Union, said he has seen an uptick in activity the past week specifically in response to the potential debit card fees.
The uproar over the fees may subside by the time they actually go into effect early next year, Lancaster said. But in the meantime it's a good idea for people to think about why they do business with their current bank or credit union.
"It's an opportunity for everyone to look at their banking relationship, regardless, and consider, 'Is this still working?'" Lancaster said.
How they stack up
Here's a breakdown of what's available at some local financial institutions:
• Bank of Tucson has a free personal checking account that includes a fee-free debit card, online banking and bill pay with a minimum balance of $500.
• Hughes Federal Credit Union offers free, interest-earning checking with no minimum balance. It includes a free debit card, free online banking and bill pay.
• National Bank of Arizona offers classic everyday checking that has no monthly fee with a $100 monthly minimum direct deposit or by maintaining a $500 minimum daily balance. That account has a free debit card and free online banking and bill pay.
• Pyramid Federal Credit Union offers free checking with no minimum balance and includes a free debit card, free online banking and bill pay.
• Tucson Federal Credit Union offers several personal checking accounts. Its regular account has no monthly fee, a daily balance requirement of 1 cent and includes a free debit card and free online banking with bill pay.
• Tucson Old Pueblo Credit Union's classic checking account has no monthly fee, a free debit card and pays interest on balances over $2,500. Another account, called nickel-back checking, earns 5 cents for each debit card transaction. It requires direct deposit, has no monthly fee and free online banking and bill pay.
• Vantage West Credit Union's ValuFirst Checking has no monthly fee and no minimum balance requirement and includes free online bill pay.
Contact reporter Dale Quinn at dquinn@azstarnet.com or 573-4197.