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Bank of America to Add New Bank Fees

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 [3]:

“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.