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Seniors losing banking perks
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November 20, 1998: 3:38 p.m. ET
Checking accounts tailored for senior citizens evaporating around the country
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NEW YORK (CNNfn) - Senior citizens are now sharing more of their bank perks -- things like discounts on prescriptions, eyeglasses and travel plans -- with their younger counterparts.
As the golden segment of the population continues to grow, some industries are failing to keep up with their increasing needs. Banks are no exception.
Forty different checking accounts targeted at customers age 60 and older have been eliminated at major banks across the country, according to the latest Bank Rate Monitor senior checking survey.
"The idea of extraneous service has been on the way out ever since banks stopped giving away toasters in the 1960s and 1970s," said Patrick Burns, director of communications at the National Council for Senior Citizens, a nonprofit advocacy group for older Americans based in Washington. The council also tracks banks that offer low-cost checking accounts.
"The real question is to what extent are the banks going to gouge customers for the few extraneous features that are left," Burns said.
Indeed, the American Association of Retired Persons reports that only eight percent of bank customers actually use the discount services that comes with a bank account.
Opening the door to more customers
As a result, some banks are either doing away with the accounts, scaling back perks or replacing them with basic checking that appeals to all age groups.
The majority of accounts tracked in the Bank Rate Monitor senior checking survey still offer such features as free safe deposit boxes and travelers checks, and discounts on car rental. Many banks have done away with perks and have added free checks and waived monthly fees.
Of the 100 banks surveyed in the top ten cities in the nation, at least one bank, Dime Savings Bank in New York, has started offering its Distinguished Dime senior checking account since the last survey in March.
"Many of the communities we serve have a high percentage of retirees, and we wanted to respond to their needs," said David Purcell, Dime's director of product management and senior vice president. "We've found that that they value features such as checking and savings accounts free of maintenance charges, premium rates on CDs and money market accounts."
Purcell said of the 90 branches in New York and New Jersey, more of the bank's older customers live in New Jersey.
Of the 40 accounts that were eliminated, one was offered by Mercantile B&T in Dallas. Mercantile did away with its Priority Plus account for customers older than 55.
"We just didn't have enough takers on the Priority account, so we made the account available to everyone regardless of age," said Wayne Christensen, president of Mercantile.
It replaced the account two months ago with the Free and Easy checking account, which requires a $2,000 minimum deposit, carries no-minimum balance and has no service charge.
Massachusetts guarantees benefits
In the meantime, senior citizens in Massachusetts enjoy a much cozier benefit thanks to the 18/65 law. Since 1992, state-chartered banks and thrifts in Massachusetts have been required to cap insufficient fund charges at $5 and waive service fees on senior checking and savings accounts. The only exceptions are interest-bearing accounts, said Jackie Cyr, a compliance officer in the consumer complaint office of the Massachusetts Division of Banks.
The fee structure hit close to home recently for Cyr, who noticed a multitude of service charges on her checking account at Fleet Bank. "When I went down to complain, they told me they would waive fees for customers over 60. I'm 64, so I got lucky. But it's getting expensive to bank at out-of-town banks."
-by Bank Rate Monitor for CNNfn
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