More fees, less service feared in bank takeovers

updated 6:29 p.m. ET Oct. 2, 2008

NEW YORK - Shannon Burdette has been a Wachovia customer for five years, but feels like she's been settling for less customer-friendly banking than she wants. She's not optimistic things will change, now that her Wachovia bank accounts have been sold to Citigroup.

"My husband and I have a credit card through Citi, and we like that," she said. "They've always been really good, but I don't have great expectations for the personal banking side."

Before Citi bought Charlotte, N.C.-based Wachovia's retail banking and other subsidiaries, Burdette had already shopped around for another bank, but had no luck. "I found the other choices were either just as bad or worse," said the graphic designer, who lives in Sykesville, Md. "I found that with all the major banks, the customer service is really lacking."

All she wants to find is a bank that has low fees, convenient branch locations and hours, and accessible staff that can answer questions. "If I have a problem, I'm going to call and I want to work it out," she said. "I don't want to be told 'There's nothing that I can do about that.'

"I'm looking for banking utopia and I don't think I'm ever going to find it," she lamented.

Dan Danckaert also shopped around the Washington, D.C. area in the past — and rejected Citibank in favor of opening accounts with Wachovia. "They seemed fee-rich," the information technologies specialist said of Citibank. "If, when this merger goes through, Citi's terms become less favorable, I'll drop them like a bad habit."

However, like Burdette, Danckaert has a credit card with Citi that he is happy with, and has no plans to close out.

Those who bank at Wachovia aren't alone in their concern and confusion these days. Washington Mutual customers are also in a holding pattern, wondering how the takeover of their Seattle-based bank by JPMorgan Chase & Co. will play out.

Seattle resident Karawynn Long said she was happy enough to stay with WaMu for 10 years. She will likely wait for the two banks to combine their systems before deciding whether to look for a new bank. "I'm just going to wait and see how it all shakes out and what they change," she said, but added that she's somewhat skeptical. "It's always possible things get better, but it's much more likely it's going to get worse for the consumer. We'll see."

Those who watch the banking industry say her instincts may be correct.

MORE FROM PERSONAL FINANCE

Personal finance Section Front

FDIC: Minorities struggle to access banks   Vanguard: 60 percent of 401(k) have recovered Answer Desk: Repairing consumer credit  New $100B safety net for jobless in works Congress scrambles to extend estate tax Auto loan delinquency rate edges higher Jobless face expiration of health benefit Cutting back is hard, cutting gift list is harder Newsweek: Delaying retirement to support the kids Holidays pose challenges for the jobless Personal finance Section Front   Add Personal finance headlines to your news reader: