If you're already feeling gouged by bank fees, it may be time to check your statements. Almost all of Canada's big banks are doling out some kind of personal banking fee increase this year.
Bank fee hikes can easily make people angry, especially when those financial institutions are earning multi-billion dollar profits. But some experts argue the charges are just the cost of doing business.
"Banks are expensive to run," says Carleton University business professor Ian Lee.
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They may be costly operations, but some also pull in plenty of cash. Last month, TD reported a second-quarter profit of $2.05 billion, up from $1.86 billion in the same period last year, thanks largely to retail bank earnings.
TD also hiked some fees on March 1. For example, the bank raised non-TD ATM fees by 50 cents to $2. It's also the last of the big banks to levy a fee — $75 — for transferring a tax-free savings account to another bank. TD said it introduced the fees "to remain competitive in today's marketplace."
The changes quickly inspired fury online.
"They make BILLIONS every year forever. But that's not enough, let's tack on a few more cents or dollars and let's make more," commented one reader on a CBC News story about the new fees.
"They're getting richer than you think," echoed another person.
CIBC was next in line with fee hikes. On April 1, it upped the minimum account balance needed to avoid a monthly fee for its Everyday Chequing Account from $1,000 to $2,000. Transaction fees associated with that account also went up.
CIBC is having a good year as well. The bank saw its second-quarter profit grow to $941 million, up 3.3 per cent from the same period last year.
CBC News asked CIBC why it introduced the fee hike, and if the bank is planning any other personal banking fee increases this year.
In response, the bank provided details about its new Smart Chequing Account, which offers a flexible pricing plan.
It isn't just savings and chequing accounts: Scotiabank, BMO and National Bank are all upping some credit card fees this year. BMO, for example, on Friday increased the charge for a missed credit card payment due to insufficient funds by $8 to $48.
This month, National Bank also raised some banking service fees by 25 cents. The bank explained that the changes are in line with their digital development.
Blame it on online banking
Professor Lee explains that charging fees for personal banking became a trend a couple of decades ago, and says it is largely the digital age that's to blame.
Lee spent a decade working in the industry in the 1970s and 1980s. He says during that time banks often didn't charge fees for personal savings and chequing accounts, which were treated as loss leaders to generate other business.
But Lee says when banks moved into the digital area, they suddenly faced enormous costs — everything from complex hardware and software development to hiring security teams who could fend off potential hackers.
"I don't find it a coincidence that they started to increasingly charge for fees just shortly after they decided to go online, investing massively in digital banking."
Lee also points out that these days the big banks face more competition from smaller institutions such as credit unions, which have "become much more aggressive, more professional at horning in."
That increased competition shrinks profit margins, Lee says, and consequently means that banks are not inclined to offer freebies.
"They incrementally and gradually moved towards pricing every product as a standalone, separate product line that had to break even or make money."
'If there's gouging, it should be publicized'
The big banks often argue the fee increases are required to remain competitive. But not all Canadians are buying it.
Duff Conacher, co-founder of Ottawa-based Democracy Watch, believes some bank fees are getting out of control. The advocacy group has been lobbying the government to investigate all bank charges.
"There needs to be an independent audit of every division of the banks to determine whether there's gouging. And if there's gouging, it should be publicized," he says.
Conacher believes the publicity could force banks to bend.
There's some evidence this can work. Last year, when new Royal Bank fees sparked public and political outcry, the company axed them.
Royal had planned to charge customers transaction fees for payments on their loans, mortgages and credit cards from some RBC accounts.
While Lee says banks have their reasons for charging fees, he believes that Royal's charges went too far.
"To charge people to make a payment that they're compelled to make out of the loan agreement, I thought that the optics were terrible," he says.
At the time, RBC said it had changed its policies because it was listening to customers. The bank tells CBC News it has no personal banking fee hikes planned for this year.
So while banks are free to up their fees, Canadians are also free to complain if they feel they're being gouged. Now and then, complaining can actually bring about change.