Washington Mutual, the nation’s largest thrift, hopes to win new customers by appealing to their displeasure over bank fees.
The savings and loan will launch a new type of checking account today that: eliminates fees for customers who use ATMs outside its network; provides free checks and free outbound wire transfers; and even gives customers one free overdraft per year.
“We expect to create a significant disruption in the marketplace,” said Stephen Rotella, president of the Seattle thrift.
Rotella said Washington Mutual innovated free checking accounts more than a decade ago and will push the envelope again to distinguish its offering.
“WaMu Free Checking” came out of focus group discussions in which noncustomers expressed their strong dislike for fees, Rotella said.
Banks have come to rely on fees for a larger share of their income, even as customers chafe about being charged to access their own money, said Rex Wilmouth, state director of the Colorado Public Interest Research Group.
“Consumers do not like a fee every time they do a transaction,” Wilmouth said. “Fees add up, and they drive you crazy.”
Some local banks charge customers $1.50 for using an ATM that isn’t in their network. Outbound wire transfer fees run from $15 to $50 or more in Denver.
And a $30 hit is typical for bank customers who bounce a check.
WaMu, which entered the Denver market in 2002 by opening 20 locations on a single day, has increased that to 54. But WaMu commanded only 0.69 percent of deposits in the Denver area as of June 30, according to the Federal Deposit Insurance Corp.
Boosting market share is a big priority for the company, Rotella said.
While checking isn’t necessarily a loss leader, the thrift – which is a big mortgage lender – expects to provide loans and other products to customers once it signs them up.
“It will be interesting to see what they roll out,” said Cristie Drumm, local spokeswoman for Wells Fargo.
The state’s largest bank has no plans to change its free checking product but will be watching to see how the market reacts, she said.
And with a little effort, any bank will be able to duplicate what WaMu is offering, said Denver banking consultant Larry Martin.
In a sign of the times, WaMu is offering free services to help customers who fall victim to identity theft, with up to $5,000 of assistance.
WaMu is also offering a free e-mail alert to customers when account balances fall below a predetermined level.
And to encourage customers to use debit cards instead of paper checks, the thrift will provide customers 3 cents back for every debit-card purchase they make, up to $250 a year.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
