Bank of America to Add New Bank Fees

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Many news outlets have been reporting that Bank of America will be instituting new fees to those with low account balances and it comes as no surprise. They are just the latest to announce tests in which account holders in certain states would be seeing these new fees. Wells Fargo has done this, Chase has done this, and many more will follow. While I support legislation to clean up aspects of our finances, like the Fair Credit Reporting Act, some laws have unintended consequences. This aspect of the Dodd-Frank bill will simply shift overdraft fee and transaction fee revenue into account maintenance fees.

Quote of the Washington Post story:

“We’re in a new economic reality. We’ve seen our customers’ behaviors change, their financial needs change,” said Susan Faulkner, Bank of America’s deposits and card product executive.

We should read that as – “We’re in a new economic reality. We aren’t banking billions in fee revenue anymore and so we need to make a change.” While I appreciate the new reality, and banks deserve to make money just like any other business, I do find the corporate-speak to be entertaining.

In the end, it’s almost as if we’re just playing a game of whack a mole. Banks charged too much in interchange fees and overdrafts, so the government stepped in. Banks will now just charge annual fees instead. There’s no law that says a bank is required to offer a free checking account and there likely will never be one. Banks are beholden to their shareholders and shareholders love earnings. When laws reduce those earnings, they have to find new sources of revenue and these new fees are it.

I have a Bank of America account and I don’t intend to ever keep $50,000 in deposits there so if they institute a fee, I’ll simply use my Ally Banking Online Checking account as my primary account. No fees, they reimburse ATM fees, and I can mail in my checks (until they offer scanning). That’s all I want from a checking account.

{ 17 comments, please add your thoughts now! }

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17 Responses to “Bank of America to Add New Bank Fees”

  1. michael says:

    i was sent an email by ally last week saying they would accept scans, as they were rolling it out to groups of customers at a time.

    i don’t have a scanner so it’s of no use to me, but i do have that option now if i click on my ‘make a deposit’ tab.

  2. Rob O. says:

    Oh, that’s rich!

    The new post-bailout economic reality is that banks can only earn modest riches off of the customers they’ve alienated with poor customer service and worse interest earnings.

    Yeah, I’m overflowing with sympathy for these hucksters who ran their companies into the ground and still walked away with enough money for a dozen lifetimes.

  3. govenar says:

    Maybe they’re doing this to encourage their customers to complain to congressmen about the law, to try to get the law repealed.

    I own BAC stock, so I kinda want them to earn more money. Even if this change makes people close their BofA account, maybe those people aren’t profitable to the bank anyway; but hopefully this won’t give too many people a bad impression that keeps them away from the bank later when they would be profitable.

  4. cubiclegeoff says:

    I don’t know why anyone banks with BoA anymore. They aren’t known for having decent customer services, they have lots of fees. There are much better places to do your banking.

    It’s sad that our society has gotten so caught up into always increasing profits ridiculously and spending ridiculous amounts of money on corporate executives. It forces too many companies to make stupid decisions like this.

  5. Jesse says:

    I baffles me why people continue to be customers of these underhanded mega banks. For me, credit unions and local, community banks are the only way to go. I haven’t had an account at a mega bank for over 10 years now and I haven’t missed the way they kept trying to nickle and dime me to death. It’s deplorable.

  6. Steve says:

    I had a citizens account years back, but got sick of their fees and checking account maximums. I switched to a community back and have been happy with them ever since. The only downside is they don’t have many ATM’s, but with a little planning, that’s never been a problem.

  7. Tom D. says:

    I agree with everyone about BoA, the good (haha) and bad aspects of their services. But, what’s another viable alternative? I heard they won’t charge you if you use your debit card at the ATM only, so buy everything with Credit, pay off the balance, and get cash for the little things. Then, who cares about the $60 a year!

  8. Rob O. says:

    Our home mortgage is with BoA only because they offered a FAR better interest rate than our local credit union. But I’m doing what little I can to screw the suits by making lots of extra principle payments to reduce the interest paid on my mortgage and get out from under these jackwagons are quickly as possible.

  9. govenar says:

    In my case, the banks kind of succeeded in getting me to do more business with them (I use Wells Fargo’s brokerage in addition to checking account, and my salary direct deposit goes into Wells Fargo; I don’t get charged any maintenance fees). But I’m not sure that it really helps the bank; I only use free trades in the brokerage and don’t keep a large cash balance in my brokerage or checking account at Wells Fargo.

  10. skylog says:

    this is only the beginning…

  11. Amy says:

    I’m confused. When Wells Fargo instituted the same fee, you questioned a commenter about why they would change banks over the fee. Now that it is happening to YOUR bank, you are going to close your account?

    Personally, I am strongly in the Credit Union camp. I don’t understand why anyone still uses traditional banks. The Credit Unions are much friendlier and don’t add these ridiculous fees. I switched long ago, and will never go back.

    • Jim says:

      Based on how I read Bank of America’s implementation, there’s no way to avoid the fee. In the original post I said “I rarely use my debit card but I’d cancel it in a heartbeat if there was a fee.” If I can cancel the card and get an ATM card w/o a fee (which doesn’t appear likely), then I’d cancel. If I can’t do any of that, then I’d cancel the entire account. I read Walt’s comment and thought he was canceling just because they had the fee even if he could avoid it.

    • Cate says:

      I used to use a credit union, however, as much of my family lives in Canada I often receive gifts by money order. My credit union charges $25/m.o. to deposit them. In addition, they no longer allow debit card transactions in Canada or Mexico. They just don’t work for me but I don’t know what the alternative is.

  12. Mike says:

    I suppose I have to thank the Obama administration for this new development. With the big banks adding these new fees due to new regulations, more and more customers will stop doing business with them.

    I really have no sympathy for BOA anyway. My local bank and credit union are good enough for me.

  13. Dave says:

    Good, it will drive more people to good banks, rather than sticking with a company that has the worst customer service I’ve ever encountered.

    At the end of the day, its a business decision. They probably did some analysis and found that they’d lose a certain percentage of customers over the new fees, but the increased revenue would offset it. Netflix did the same thing recently and it was an absolute catastrophe for them. Something tells me the same thing will happen with BOA.

    I have a hunch that this behemoth of a company is so out of touch with its customers that its estimates are way off.

  14. poscogrubb says:

    Suggestion for future article: How to shop around / switch to a credit union? I’d find that helpful.

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