WITH more than 12,000 commercial banks or savings institutions operating in the United States, charges of too little competition sound improbable.
Yet that is what two consumer groups say: Fees for bank customers may be soaring because of collusion that violates antitrust laws, according to the Consumer Federation of America and the US Public Interest Research Group, both based in Washington.
Bounced-check fees, for example, far exceed the cost of the problem to the industry, the two groups say. They add that these fees are ``often uniform in any given market'' and have risen 21 percent in the last four years to an average of $18 a check. Similarly, a bank's average charge for customers using another bank's automated-teller machine has risen 37 percent to 98 cents, even as the costs of ATMs to banks have fallen.
In a June letter to Anne Bingaman, the Justice Department's antitrust chief, the consumer advocates allege that ``unnatural'' forces are at work, and that bankers trade pricing information and strategies at industry gatherings.
The call for an investigation comes as banks have risen from being one of the nation's most-troubled industries, with many bad real estate loans in the late 1980s, to reporting record profits. ``There was no taxpayer bailout for the banks; it was the bank customers that financed the bailout,'' says analyst Warren Heller, adding that ``fees have been rising like a rocket'' in the industry. But an antitrust case would be tough to prove, says Mr. Heller, who is research director at Veribanc Inc. in Wakefield, Mass. Banking markets are ``pretty competitive,'' and customers shop around for the best place to park their money, he says.
Justice Department spokeswoman Gina Talamona says: ``The antitrust division is conducting an investigation that involves certain practices in the banking industry,'' but she will not say if the case involves fee collusion. Banks say consumer advocates have simply become as jealous of the now-robust profits as they once were concerned that many banks would fail. Thomas Greco, associate general counsel for the American Bankers Association, says he sees no solid evidence to back up the allegations.
``It's certainly conceivable that some institutions might ... play bridge together'' and agree on prices, says Gail Liberman, editor of Bank Rate Monitor, a newsletter based in North Palm Beach, Fla. But she says pricing similarities more likely stem from banks seeking profits by keeping close tabs on competitors. Also, she says, fees are becoming a more important part of banks' income: With the baby-boomer generation maturing, a decline in lending will turn a ``borrowing society into a saving society,'' undercutting interest income, which is now three-fourths of bank revenues.
Noninterest income (much of it from fees) was up 14 percent at commercial banks last year from 1992. Noninterest expenses, by comparison, rose only 6.6 percent, according to the Federal Deposit Insurance Corporation.
The consumer groups complain that customers may not realize the magnitude of fees because they are deducted from deposits rather than billed. The advocates also argue that lower-income households are bearing the brunt. Reduced or no-fee services are often linked to retaining a significant minimum balance in the account, driving smaller depositors ``into an underground world populated by loan sharks'' and expensive check-cashing firms.
Bruce Hodge, a vice president of First Union Corporation in North Carolina, counters that many banks offer basic checking accounts with no monthly service charge. The average charge for basic checking is around $3.14 a month, he testified in a congressional hearing recently. Seafirst Bank in Washington State offers free checking, for example. One way Seafirst cuts its costs: Users don't get their cleared checks returned with the monthly statement, nor do they get reproductions of the checks. The statement lists cleared checks and customers can request a copy of a specific check if needed.