By ALLISSA KLINE
akline@bizjournals.com | 716-541-1612

The days of truly free checking accounts may be dwindling nationwide, but so far there are few changes planned for banks in Western New York.

Neither HSBC Bank USA NA nor M&T Bank, the region's top two deposit-takers, are planning immediate changes to their checking account structures. The same goes for First Niagara Bank, Evans Bank, Community Bank and Alden State Bank.

But that doesn't mean new bank fees won't eventually be imposed on customers. KeyBank, the fourth-largest bank in the region, plans to add a $5 monthly bank fee to its existing "Key Express" checking account if customers don't make five transactions per month or if the account falls below $500. The change is effective April 1.

"Banks are facing some challenges, so we have to constantly evaluate the cost of our products against what our competition is offering," said Gary Quenneville, president of KeyBank's Western New York district. "It's almost a ‘back to the future' kind of thing. (Some banks) are going back to a time when it was pretty common to require a minimum balance or direct deposit to get free checking. This might end up forcing banks to go back to the basics of products and services."

Nationally, the idea of free checking is already fading. Bank of America, which operates 35 branches in Western New York, announced last week that it will eliminate free, no-rules checking accounts for new customers starting in the second half of 2011 and for existing customers in 2012. The Charlotte-based bank pointed to the "new economic reality" as the driving force behind the changes.

Simply put, banks say that certain regulatory changes - such as the new federal rule that banks must get customers' permission before charging overdraft fees - are making it difficult to do business.

Yet Alden State Bank has no plans right now to change its fee structure for checking accounts.

The two-branch bank currently offers several checking accounts with no monthly service fees or minimum balance requirements.

"I think we want to be competitive and we're hoping we can pick up some deposits," President Richard Koelbl said. "We're definitely going to wait and see where other banks' fees fall ... and we'll see how all of that affects us."

Officials at M&T and Evans banks are taking similar approaches. M&T currently offers a "Totally Free" checking account with no monthly service fee or minimum balance requirement. Evans offers a "Simply Free" account with no requirements. Kevin Brady, vice president of marketing and public relations at Evans, said the future of free checking at the bank depends largely on the Federal Reserve proposal to cut interchange fees between 70 percent and 80 percent.

The bank is bracing itself for a reduction in the amount it receives for debit card transactions.

"I think every bank is looking at what they need to do and when they need to do it, but we're waiting until we know for certain how it will affect us," Brady said. "We're made no decision to modify our terms or the pricing on any of our products at the moment."

M&T, too, is taking a wait-and-see approach, spokesperson C. Michael Zabel said. The Buffalo-based bank "continues to monitor" the marketplace and its competitors, he said.

"We've seen the landscape changing around us," he said. "What the future brings for the industry as a whole is hard to predict right now."