Minnesota-based TCF Bank announced on Wednesday that it will reintroduce its TCF Free Checking account, an account with no monthly fee and no minimum balance requirements. The decision came after extensive market research, according to TCF.
Previously, TCF’s basic checking account came with a $9.95 monthly fee, which was introduced in February of 2010, months before the Dodd-Frank Act was passed. In 2011, the bank said it would be looking at the legislation’s impact on its debit rewards program. The bank no longer offers debit rewards, but it does offer free mobile and online banking with its newly-gratis checking account.
Since the Durbin amendment to the Dodd-Frank Act went into effect last fall, many large banks introduced fees to their checking accounts in response to the decrease in interchange fee revenue, which was capped by the Durbin amendment. Frequently, banks will require customers to go paperless, use direct deposit, or keep high minimum balances in order to waive monthly maintenance fees. Widespread consumer outrage over checking fees culminated in Bank Transfer Day in November of 2011, when many American promised to end their relationship with large financial institutions, by moving their money to credit unions and community banks.
It did not live up to its promise, primarily because smaller banks don’t provide the same level of convenience that large institutions do, according to a study by Javelin Strategy.
“It’s simple. We asked lots of consumers what they want. We listened and we’re responding by delivering a product they deserve,” said William Cooper, Chairman and CEO of TCF Bank, in prepared remarks. Furthermore, Cooper said that the bank has made a number of steps to improve its capital structure in order to better serve its customers.
TCF Bank has $17.8 billion in assets, and 430 branches throughout the Midwest, making it ineligible for exemption to the debit interchange cap imposed by the Durbin amendment. (Banks with less than $10 billion in assets are exempt.) As a large regional player, TCF Bank likely recognized the opportunity to differentiate itself from both large national banks and small community banks — the former can no longer offer free checking, and the latter can no longer offer the same level of convenience and omnipresence.
Regional banks are in a unique position these days to win over fed-up consumers.