A Chicago Chase customer contacted Ann Hilton Fisher of AIDS Legal Council  in March of 2011 after his account was charged $12 because he didn’t have a single direct deposit of at least $500 into his checking account, even though he receives two disability payments from the Social Security Administration that total over $500 in aggregate. When this 47-year-old customer asked local bank branch staff to waive the fee, a bank employee suggested that the client “have Social Security send both checks together,” which is not feasible.

Ms. Fisher and her client agreed to partner with Woodstock Institute to raise the fee issue with Chase and its federal banking regulator, the Office of the Comptroller of the Currency (OCC). We challenged the new Chase bank account fee policy that imposes an excessive $12 monthly fee unless the customer has at least one direct deposit of at least $500 per month or maintains substantial assets at the bank.

Under the federal Community Reinvestment Act (CRA), Chase has an obligation to serve the banking needs of all persons in its service area, including low- and moderate-income people. Chase is currently undergoing its periodic CRA examination, which includes a fair lending analysis. We asked the OCC in an April 12 letter to include the letter in the Chase CRA file and to give Chase a “Needs to Improve” rating on the CRA Services test.

After raising the fee issue with Chase and its banking regulator, Ms. Fisher and her client and Woodstock staff met with Chase on May 9 in Chicago. In addition, consumer advocates from around the country participated in the meeting by phone. We explained that, as a former low-wage worker, the Chase customer receives both SSDI benefits and SSI benefits. We noted that hundreds of thousands of disability benefit recipients are in the same boat, with multiple checks of less than $500 at a time.

The advocates asked Chase to consider several options to better serve community needs, including waiving fees if the customer has direct deposits of at least $500 per month in aggregate, lowering the minimum direct deposit amount to qualify for a waiver to $400 or less, waiving the fee unless the account is dormant for the month, charging all customers the same low amount for checking accounts, and creating a lower-cost account for lower-income customers or customers at branches in low- and moderate-income areas. We also asked Chase to waive the $3 ATM fees it charges recipients for ATM withdrawals of state-administered public benefits.

Chase claimed that it costs the bank $300 a year to maintain a checking account and that it “can’t be all things to all people.” While Chase admitted that it does not need to make the same level of profit on each account, it argued that recent and pending consumer protection laws and regulations are putting pressure on bank profitably. Chase acknowledged, however, that its fee policy disproportionately impacts some customers with disabilities.

On May 13, Chase announced that it has agreed to change its policy so that customers with direct deposits of Social Security payments totaling at least $500 per month in aggregate will qualify for the fee waiver. Chase is working to implement this change as quickly as possible, probably within a few statement cycles or months. Woodstock Institute and our partners thanked the Chase team for acting quickly to make this important policy change. We also asked Chase to continue to consider our other recommendations, which, if adopted, would expand access to affordable checking accounts to many more customers and potential customers.

I was pleased to have had the opportunity to work with Ann and her client and to reach out to many colleagues in the disability community. The following organizations also expressed support for this policy change and applauded the advocates’ successful efforts: World Institute on Disability (Oakland, CA); Health & Disability Advocates (Chicago); Coalition of Citizens with Disabilities in Illinois; National Disability Institute (Washington, DC); Equip for Equality (Chicago); Access Living (Chicago); and the National Community Reinvestment Coalition (Washington, DC).

Based on the latest Social Security Administration data from December of 2009, this Chase fee policy change potentially affects more than 200,000 people who live in states where Chase operates (38,230 in Illinois). Even if Chase has only 10 percent of that bank account market (its approximate market share in overall retail), that’s a savings of at least $550,512 a year in Illinois alone and over $3 million nationally (based on 10% x $144/yr).

I encourage other bank customers to contact Woodstock Institute regarding bank fee issues and other banking issues that affect many customers. As anthropologist Margaret Mead said, “Never doubt that a small group of thoughtful, committed citizens can change the world.”