Bank of America / Wells Fargo check cashing fee recap

SF Chronicle's David Lazarus has written 3 more columns this past week on the issue of Bank of America and Wells Fargo charging non-account holders fees to cash paychecks drawn against their banks:

Last Monday, Sen. Florez unvelied two new bills: SB1917, prohibiting banks from charging paycheck-cashing fees to non-account holders, and SB1916, to specifically exempt state workers from such fees.

At last Wednesday's CA Senate Banking Committee hearing, Bank of America and Wells Fargo offered the following 4 reasons as justification for the fees:

  • There's a cost involved in cashing checks, and someone has to pay it.
  • Non-account holders take up tellers' time that might otherwise go to serving those who do have accounts at the bank.
  • Honest-to-goodness account holders shouldn't be inconvenienced by long lines resulting from the presence of non-account holders.
  • The chance of fraud is greater when a non-account holder brings in a check because the bank doesn't necessarily know this person.

The banks did not answer other committee questions. After the hearing, banking committee chairman Sen. Dean Florez said, "It was the worst form of stonewalling I've experienced chairing committees in the Legislature."

Future hearing are planned, one in San Francisco and possibly one in Los Angeles. In the meantime, Sen. Florez plans to ask state treasurer Phil Angelides to consider pulling out all state funds on deposit with Bank of America and Wells Fargo until there is a resolution to the fee dispute.