News Release

New Jersey Department of
Banking and Insurance

Commissioner Tom Considine

For Immediate Release:
December 17, 2010

For Further Information:
Ed Rogan or Marshall McKnight (609) 292-5064

TRENTON – As Christmas shopping enters into its final week and holiday banking activities reach high levels, New Jersey Department of Banking and Insurance Commissioner Tom Considine urged consumers to be aware of banking fees in general, and in particular the check cashing fees some banks charge consumers who do not hold accounts with them.

Commissioner Considine warned consumers to inquire about all fees before attempting to cash a check at a bank where they do not hold an account. Further, he said, fees can be charged even if the check is drawn on an account maintained at the bank where the consumer is attempting to cash it.  

“Anyone attempting to cash a check in a bank where they do not have an account should first ask about fees,” he said. “If they find there are fees, they should consider an alternative, particularly a bank where they maintain an account where check cashing is generally free.”

“Just because the name of the bank you’re in matches the name on the check, it doesn’t mean you will automatically avoid a service charge,” he said.

In a consumer alert issued today, the Department encourages all consumers to make the necessary inquiries and learn about any service charges before attempting to negotiate a check. Such a fee could be charged even when the check is drawn on an account held at that institution.

In addition, banks may charge routine fees for other activities, such as: using a competitor’s ATM, writing a large number of checks, or allowing an account balance to drop below a specified amount. By taking special care to avoid these occurrences, consumers can reduce fee assessments.

Consumers should also be aware that they may obtain a “consumer checking account,” a low fee product offered to help New Jersey citizens deflect extensive service charges.

“Consumers have a variety of choices that will allow them to have access to their hard earned pay free of charge,” said Commissioner Considine. “For example, the bank or credit union where an employer maintains its payroll checking account may offer free check cashing to the company’s employees. There may also be other options. Consumers should remember that they have the right to speak to a manager. That individual may have the authority to waive or lower a service charge.” 

Considine said it is more important than ever for consumers to know their rights and to read contracts and other consumer information. Specifically, consumers should be aware if checks they write as gifts will cause the recipients of those gifts to be assessed a fee when they cash them.

“If consumers read disclosures carefully, they can make smarter choices in choosing such things as a banking account, a credit card or a mortgage which can have a huge financial impact on their lives,” he said. “That is one of the reasons the department has a financial literacy program.”

Since 2006, staff at DOBI and New Jersey’s financial institutions have taught thousands of young people how to establish and preserve good credit, set up a budget, open checking and savings accounts and guard against identity theft through a Financial Literacy program. The program, generally conducted in high schools, has reached more than 25,000 students in more than 300 public high schools from all 21 counties.

Program participants include the New Jersey Department of Education, New Jersey Coalition for Financial Education, Federal Deposit Insurance Corporation, New Jersey Bankers Association, Mortgage Bankers Association of New Jersey and the New Jersey Credit League.