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Bank Accounts and Loans

in Bank, Bank Fees

It seems to be normal practice for most banks these days to attempt to maximize their business with you. Many try to upsell services to you, but others go with a simpler strong-arm tactic, if you want the service you must bank with us. This is within the rights of the bank to demand this, but you don’t have to capitulate either.

An example of this is the practice of forcing anyone opening a debt vehicle with the bank, to also have to open a chequing account. This situation arises if you use a Mortgage Broker or have bargained with many banks for your Mortgage.

Bank Accounts and Loans

You don’t have to open an account, but the bank won’t let you play either.

Creating the chequing account typically forces the user to have to pay a monthly fee to have the account (not in all cases, but in some cases). I have seen this with Student Lines of Credit, Mortgages and HELOCs as well.

This “policy” seems a throwback to the days when banking was done during bankers’ hours, but also another cash grab to make consumers pay more for services they aren’t using. This implies that transferring money from a different bank is hard for banks. The real reason would be they can then see the funds are available to pay the loan in question.

A reason I have heard quoted by bank representatives is that if the customer wants to have access to  on-line banking (e.g. to check their loan balances) they will have to open a chequing account. Seems a bit thin, as a reason, but I am not a bank.

Are All Banks Like This ?

These examples I have heard are from the “Big Banks” I am not sure about the on-line banks or trust companies.

As a stock holder in the banks it seems like a good business practice, but as a consumer I am tired of dying a death of a thousand paper cuts. Having to pay service fees to many banks a month does add up.


  • Anonymous Banker January 15, 2018, 9:50 PM

    I know this post is a few months old, but in reading it I have to wonder, wouldn’t this be covered by Coercive Tied Selling laws? One of the first things I was taught when I got into banking was that it was illegal to coerce a client into accepting a product as a condition for another product. Seems like these companies are treading awfully close (if not over) that line… https://www.canada.ca/en/financial-consumer-agency/services/rights-responsibilities/rights-tied-selling.html

    • bigcajunman January 16, 2018, 5:47 AM

      You’d think that wouldn’t you? Thanks for pointing me at some new research material though, much appreciated Anon Banker, please come back and comment again! (I try to answer all comments, and luckily I don’t get too many 🙂 ).


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