Wednesday, November 02, 2011

TD Bank Announces Higher Customer Fees

In the controversies that have swirled around bailouts, foreclosures, customer fees and executive pay, one bank that has avoided much attention is TD Bank. The parent company, more properly known as “Toronto-Dominion Bank” (hence, “TD”), is headquartered in Canada, and has tended to play by more traditional banking rules and avoided American media attention.

But today, one day after the Bank of America aborted their plan to increase customer fees, TD Bank sent letters to depositors announcing an increase in the types and amounts of customer fees that they will be charging.

We are in an era of financial crisis, in which the largest financial institutions have been declared to be “too big to fail.” And yet, TD Bank is a glaring example of a multinational bank that is the result of the mergers or purchase of dozens of once-small, community banks. At least 39 once-independent financial and insurance institutions in the United States alone (listed at the end of this post) have been gobbled up by this behemoth.

Today, TD Bank is the 6th largest bank in North America, and the second largest in Canada. Over 41% of the company is owned by Financial investment houses and other banks. It is the largest bank in Maine (controlling over 40% of the market share); within 1% of the being the largest bank in Vermont (with a 21% market share); the second largest in New Hampshire (with a 19% share, it is larger than Bank of America); the third largest in New Jersey; and fifth largest in Massachusetts.

In 2009, due to “industry trends” and the global financial crisis, Toronto-Dominion Bank responded by cutting Chief Executive Ed Clark’s salary by 5.5%, to a “mere” $10.4 million Canadian Dollars ($9.8 million US). This, I guess, should make us feel better about large banks.
Meanwhile, Yahoo Financial Analysts predict that TD Banks profit will increase 354% by this month next year.

Part of that profit-enhancing plan includes the following new fees on customers:

Money Orders: increase from $4 to $5

Bank Checks: increase from $4 to $8

Incoming Wire Fee: increase from Free to $15

Stop Payment Fee: increase from $25 to $30

Printed Check images with statements: increase from Free to $24 per year

Telephone or online bill pay: increase from Free to $9.00 per transaction for all transactions beyond 6 per month

Last year TD Bank was the subject of a class action suit for the manner in which it charges overdraft fees. Customer Donald Kimenker claimed in his complaint that TD Bank “deceptively reorders” an account’s debit card transactions in its computers to maximize overdraft fees. Such fees are processed from highest dollar amount to lowest, rather than in chronological order of purchases, according to the complaint.

“Charging the largest debits against available funds ahead of smaller debits results in more overdraft fees, as available funds decrease faster than they would otherwise, thereby generating hundreds of millions of dollars in additional overdraft fees for TD Bank,” according to the complaint.

Kimenker claims that a customer with $1,150 in an account who makes six debit transactions totaling $180 and then writes a $1,100 rent check would have overdrawn her account by $130. Rather than charging a single $35 overdraft fee on the rent check, TD Bank processes the rent check and then charges five separate $35 fees for a total of $175, according to the complaint.

It’s never too late to Move Your Money to a Credit Union


The once-local institutions that have been swallowed into TD Bank are as follows:

Portland Savings Bank, People’s Savings Bank (Lewiston, Maine), Rockland Savings Bank, Penobscot Savings, Waterville Savings, Franklin County Savings Bank (St. Albans VT), Lamoille County Bank & Trust Company, Woodstock National Bank, First Vermont Bank & Trust Company, Granite Savings Bank & Trust Company, Howard National Bank & Trust Company (Burlington, VT), Northeast Leasing, six branches of Casco Northern Bank, First Coastal Bank (Portsmouth, NH) Merchants National Bank (Dover NH), First National Bank of Portsmouth (NH), Oxford Bank & Trust Company, Mid-Maine Savings (Auburn, Maine), Bankcore, Inc / North Conway Bank (NH), Bank of New Hampshire, Family Bancorp (Haverhill, Mass.), Atlantic Bancorp (Portland, Maine), CFX (Keene, NH, originally Cheshire County Savings Bank,), Springfield Institution for Savings Springfield, Mass.). Farmington National Bank (NH), Evergreen National Bank (Glens Falls NY), Andover Bancorp (Mass.), 17 branches of MetroWest (Mass.), Ipswich Bancshares (Mass.), Warren Bancorp (MA), Community Insurance Agencies, Inc., Bancorp Connecticut, American Savings Bank (New Britain, CT), Cape Cod Bank & Trust, Boston Federal Savings Bank, acquired Hudson United Bank (Mahwah, NJ), Middletown Savings Bank (NY), Interchange Financial Services Corp (NJ), Boothby & Bartlett Insurance (Waterville, Maine), and Commerce Bancorp (Cherry Hill, NJ)


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