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Kokua Line June Watanabe |
Bank fees
for inactivity
are permittedQuestion: Is it legal for banks to charge monthly inactivity fees? Recently, my mom received a letter from Territorial Savings notifying her of an increase in service fees to its customers. That included a $3-$5 monthly charge for accounts where no activity was recorded from 6 to 12 months, depending on the account. When my mom called the bank, she was told to deposit $10 or so in her account every month to avoid the inactive account fee. However, I've heard from friends that such a fee violates federal banking laws. So far, Territorial has been the only bank I've seen that has done this.
Answer: Yes, it is legal for banks to charge such fees.
"Most of the banks do charge fees on inactive accounts -- there are very few of them that don't," said an official with the federal Office of Thrift Supervision's West Region, based in San Francisco.
A spokesman for Territorial Savings said the bank has long charged a fee for inactive accounts, increasing it recently to $5 from $3.
But "if (customers) have a legitimate complaint, we'll just reverse the fees," he said.
The fee for an inactive account is "for the protection of customers, too," he said. "If there is no activity, we would want them to close the account as soon as possible, because somebody else could be messing with the account, especially with a lot of burglaries of homes."
He also clarified that a customer does not have to make a deposit every month, but depending on the account, "within a six-month period, there should be some activity in the account." For a savings account, there's a fee for inactivity after three years, he said.
Territorial was a state savings and loan institution before becoming a federal savings bank in September 2002.
Even if it were a state-chartered institution, the state Code of Financial Institutions is silent on the subject of specific fees and charges that it may assess account holders, said D.B. Griffin, commissioner of the state Division of Financial Institutions.
"Basically, any institution is free to set its own fees as they see fit, based on competitive forces and market considerations," he said. The theory is that the customer is free to choose among the different banks.
On Social Security cards
A Kokua Line reader (and businessman) points out that the Immigration and Naturalization Service, since Nov. 6, 1986, requires all U.S. employers to complete Form I-9 whenever it hires anyone -- citizens or noncitizens -- to perform any labor or services. The employer must verify the employment eligibility and identity documents presented by the employee.The immigration service allows employers to accept several different documents as proof of employment and eligibility, but the reader says the two most used documents are a state driver's license or ID card and a Social Security card.
"There are other options, but the simplest and most widely used is the foregoing combination," he said. "Keep your Social Security card in a safe place."
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Honolulu 96813. As many as possible will be answered.
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