PNC Says It Will Maintain Free Basic Checking

Most big banks are raising fees on checking accounts and other services, but PNC says it will keep its basic checking account free, although some perks will go away.

The Pittsburgh-based bank, the nation's sixth-largest, says basic checking customers will no longer get debit card rewards or refunds of fees when they use a non-PNC ATM machine, but basic checking will remain free.

"We are focused on understanding what our customers want and need to achieve their financial goals," said Joseph Guyaux, president of PNC. "As a result, we've made it easier for them to save, manage spending and avoid fees."

Banks have been piling on new fees in anticipation of a new federal law that limits how much banks can charge merchants for debit-card transactions. Banks say they need to make up for that lost revenue but although PNC estimates it will lose $800 million from the new rule, it thinks it can squeak by without jacking up fees for its poorest customers.

PNC hopes it will attract some new customers from Bank of America, J.P. Morgan Chase & Co. and other banks that are raising their fees. It also hopes that some of its basic customers will sign up for fee-based accounts that offer more services and is lowering the minimum balance requirements for some types of accounts.

PNC estimates about 70 percent of its customers currently have free, basic checking accounts.

PNC said it would introduce a prepaid, reloadable card for lower-end customers in June. Other banks also are introducing prepaid cards for customers whose checking accounts carry low balances, making them less profitable for the bank.

PNC also said it is reducing restrictions on Virtual Wallet, its online and mobile bank account to encourage greater use by its mainstream checking-account customers.

The new rules that cap fees on debit transactions take effect in July. Banks are fighting the provision.

Currently, banks charge merchants an average of 44 cents to process a debit card sale. The Federal Reserve is proposing to cap that figure at between 7 and 12 cents.