Checking Accounts

Wells Fargo & Co. announced Tuesday that it had settled a lawsuit over check-cashing fees by agreeing to make it easier for employees of small businesses to qualify for free checking accounts. The suit, filed by Chaffee Enterprises of Bakersfield, a paging services company, alleged that Wells Fargo's policy of charging non-customers $5 for each check cashed violated a 1911 California labor law that requires employers to provide a place where workers can cash paychecks for full face value.

Washington Mutual Inc., which has made free checking a cornerstone of its marketing campaign, is about to start imposing a $5 fee on noncustomers who come into a branch and cash a check drawn on a WaMu personal account. In other words, let's say you're a WaMu customer and you write a $30 check to your buddy Bob for his collection of vintage Peter Frampton records. If Bob, who doesn't have a checking account, cashes the check at his local WaMu branch, he'll only get $25. WaMu would keep $5.

Trisha Lane is hard on her body. So far this year, the professional rodeo contestant, Hollywood stuntwoman and part-time model has broken her left arm, cracked her tailbone, fractured three ribs and sliced open her knee. She's also hard on her bank. The 31-year-old deposits between 10 and 20 checks per month, always bypassing the automatic teller machine for the teller window.

Eight check-cashing offices in South Central Los Angeles closed last week by the state were reopened Thursday with the promise that $2.7 million in outstanding money orders would be honored. The new owners, Continental Currency Services, bought the insolvent business from state banking authorities and agreed to honor an estimated 30,000 outstanding money orders issued by the previous operators.

Monthly fees for interest-bearing checking accounts at California savings institutions continue to rise while interest paid on the accounts has dropped to as low as 4%, meaning that some accounts are costing consumers more than they earn, a survey to be released today by a San Francisco consumer group shows.

Lost in the debate over last week's banking reform legislation are "truth in savings" provisions aimed at forcing banks to clearly state rates and fees on savings and checking accounts. The bill, passed by Congress last week and awaiting President Bush's signature, gives the Federal Deposit Insurance Corp. the authority to borrow up to $70 billion to protect depositors of failed banks.

Wells Fargo has settled a class action lawsuit over bounced-check fees and agreed to give plaintiffs in the case benefits including one year's $18 credit card-fee. An earlier settlement was vetoed two months ago because of a sharp expansion in the types of bank fees that would have been protected from legal challenge. The latest agreement, approved by the court, includes a $1-million consumer education fund.