Banks Must End Check Fees for Some

New Law Exempts Clients Under 19, Over 64 From Charges

Massachusetts banking customers under the age of 19 or over 64 can now have a checking, savings or NOW account without having to pay any service charges.

A new state law which took effect last week prohibits banks and savings and loan associations from charging minors or senior citizens for those services.

All banks in Harvard Square are affected by the measure. Cynthia Farran, assistant Vice-President for Marketing at Bay Bank/Harvard Trust, said Bay Bank officials would "notify all customers that the accounts are available and would be asking all customers to come in, register and let us know their age."

The law covers "maintenance" charges--charges incurred for falling below a required minimum balance--as well as charges for each check written, according to state officials.

The law also sets the fee for bounced checks at five dollars. Customers must still pay for the cost of printing their checks.

Banks must notify customers of the new law. Joseph Leonard, Massachusetts First Deputy Banking Commissioner, said that banks must post conspicuous signs to let customers known about the new law, and they must include an envelope stuffer in their next mailing.

After the notification process Leonard said, "the burden shifts to each person" to tell the bank if he or she qualifies. He added that since banks are not aware of the ages of their customers, customers will still be charged for services until they inform the bank of their age.

Andrew J. Rogers (D-Framingham), Chairman of the House Committee of Banks and Banking Services, introduced the bill. He said that "a few banks spoiled it for the majority" by abusing their right for service charges. He said that the bill passed the House unanimously in the early summer Gov. Michael S. Dukakis signed it on July 13.

Banking lobbies opposed the measure because they thought it wasn't necessary, according to Rogers. He said that they argued that enough banks already offered these services.

Rogers added that this "might be the first such law in the nation" and that the New York State Senate might be considering a similar measure.

Minimum balance fees caused children to lose money in their small savings accounts, explained Peter S. Rockett, research analyst for the banking committee. He added that constituent mail indicated that this was a problem on people's minds. Rogers said the bill also gave another "needed break to senior citizens."

There was confusion in the banking community over the bill, Rogers said. He added that because of its general nature the banking commissioner issued an interpretation. He said the bill allows the commissioner to permit any other fees he deems reasonable, such as the bounced check fee.

Eugene Graham of the Massachusetts League of Cooperative Banks said that his organization would file a bill next session "that is more specific than this one."

He said there were still questions about whether wire transfer charges are considered exempt. A new bill might also eliminate only maintenance fees, said Graham.

Banks were uncertain about how the measure would affect them. Robert L. DeGregorio, Senior Vice-President at Cambridge Trust Company, said it is too early to tell how much money the bank might lose because of the changes.