A new twist on bank fees.(check-cashing fees for noncustomers)

You can understand a bank refusing to cash a bad check. But what's up when big banks won't honor a valid check drawn against good funds on deposit in their own vaults? Increasingly, banks will pay up only if the bearer of the check pays a check-cashing fee of $3 or more.

And now that trend promises to speed up after big national banks scored a victory in December, when a U.S. District Court in Texas nullified a state consumer-protection law that prohibited certain check-cashing fees. "I predict you'll see more legal action by banks in other states if this court ruling stands," says John Heasley, executive vice president of the 600-member Texas Bankers Association.

Banks already collect a multitude of fees from account holders. Now, check-cashing fees are designed to hit up noncustomers: everyone from employees cashing a paycheck at their employer's bank, to people who bank elsewhere but want payment right now, to low-income consumers with no bank account anywhere.

Bank One began charging $3 in the late 1990s and now does so in 13 of the 14 states where it has branches. In August 2000, JPMorgan Chase began charging 1.5 percent of the check's face value with a minimum $5 fee. Bank of America levied its $3 fee in June.

The fees go beyond covering expenses. A 1999 study by the Federal Reserve Bank says it costs big banks only 36 cents to cash a check drawn on one of their own customer's accounts. And that cost is already figured into what the account holder pays for the checking account.

Lawsuits have been filed in several states, with consumers mostly losing. The Texas suit is the first in which banks sued to assert their right to charge.

Bank of America, Bank One, Chase, Comerica Bank-Texas, and Wells Fargo Bank Texas argued that federal banking regulations allow them to charge fees to their customers and preempt a Texas law requiring banks to pay the full face value of a ...