What Happens When Consumer Banks Merge?

Wells Fargo has taken over Wachovia, but the bank can’t promise there won’t be more fee changes.

Wachovia customers are still seeing storefront changes at their local branches since its acquisition by Wells Fargo, but if previous mergers between its competing banks are any indicator, there could be even more changes to come for account holders.

Earlier this month, New York and Connecticut Wachovia customers saw their bank branches switch over to Wells Fargo “stores,” which are really just branches by another name, and Pennsylvania Wachovia branches will change over to Wells Fargos in mid-April, according to the bank.

Behind the scenes, Wachovia accounts converted to Wells Fargo accounts in phases over the past two years. But even though the merger was officially closed at the end of 2008, it’s still unclear how fees could change in the coming few years.

In fact, some of those who received discounts or had any bank fees waived on their Wachovia accounts might see those fees reinstated, according to the Wells Fargo website, and fees could rise across the board.

Wachovia has already gotten rid of its free checking account offering and now only waives monthly fees if you maintain a certain balance or enroll in direct deposit.

[Survive the demise of free checking]

The union of Wells Fargo and Wachovia is just one of many similar deals that have closed between banks in the past several years, and as the number of banks out there shrinks, that means less competition among them and fewer banks trying to undercut their competitors.

Add to that government regulations that limit overdraft fees and the need for banks to recoup those lost revenues and and rising fees could be difficult to avoid in the long term.

Similarly, when Chase took over Washington Mutual, WaMu free checking was eventually eliminated after the accounts were acquired in 2008 unless account holders had regular direct deposits or minimum balances remained above a certain amount.

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