Wells Fargo & Co. (NYSE:WFC), the bank with the most U.S. branches, is ending free checking in six Eastern states starting in May, expanding a $7 monthly service fee for the use of its basic checking account.
New and existing customers in New York, New Jersey, Connecticut, Georgia, Delaware and Pennsylvania must pay $7 a month if they receive paper statements and $5 if they chose to go with electronic statements, Lisa Westermann, a Wells Fargo spokeswoman, told Bloomberg.
Customers can avoid the fee by keeping a minimum balance of $1,500 or making direct deposits of at least $500 a month, Westermann added.
The San Francisco-based bank stopped offering free checking accounts to new customers in 2010, while existing customers were able to maintain their free accounts. But last year, Wells Fargo moved to charge existing customers in 23 other states the same $7 fee.
Wells Fargo has 6,200 branches in 39 states and plans to expand the fee to the remaining 10 states, though the bank did not give a schedule.
The bank said the change will affect "a relatively small number of customers" because 80 percent of the bank's checking customers avoid fees, CNNMoney reported.
Banks have been doing away with free checking accounts as new regulations curb fees on overdrafts and other service charges.
Bank of America Corp. (NYSE: BAC) is testing a pilot in Arizona, Georgia and Massachusetts with new fees for checking accounts, starting at $6 a month. The fees can be avoided by maintaining certain minimum balances.
Last year, the Charlotte, N.C.-based bank dropped its plan to impose a $5 debit card fee after a nationwide backlash from consumers and lawmakers.
Wells Fargo & Co. (NYSE:WFC) shares jumped 3.22 percent Thursday to close at $31.39 a share, while the stock price of Bank of America Corp. (NYSE:BAC) edged up slightly to $8.06 a share.