RI banks turn to fees to boost profit margins.(Brief Article)

Rhode Island banks today are reaching deeper into their customers' pockets than ever as checking account fees continue to rise here and across the country.

Federal Deposit Insurance Corp. financial reports show that, although deposits at banks chartered in Rhode Island have dropped, service charges on deposit accounts here jumped nearly 5 percent to $89.5 million, in the second quarter from $85.5 million in the second quarter of last year.

And individual increases in service charge income at more than half of the commercial banks chartered in Rhode Island topped 10 percent during the period, according to FDIC financial data.

By comparison, Massachusetts banks collectively reported just $66.4 million in revenue from deposit account fees in the second quarter although almost twice as much money is deposited in banks there as here.

Bankers said the service charge figures are deceptive because, although deposits aren't increasing, the mix of deposits here could be shifting from certificates of deposit that don't typically include fees to checking accounts that typically do.

"If the fee income from year to year has increased, I suspect the number of services that people use has also increased," said Merrill Sherman, president and chief executive officer of Bank Rhode Island.

But hers isn't the only explanation of the upsurge in service charge income here.

"It could be that the banks contained in those reports have raised the minimum balance amount …