Bank of America Strikes Again

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Just a few months after public outrage forced Bank of America to drop a planned $5 fee for using debit cards to make purchases, the financial institution is at it again.

A night scene of a Bank of America ATM on K Street NW in Washington. November 2006. (AP Photo/J. Scott Applewhite)
A night scene of a Bank of America ATM on K Street NW in Washington, Thursday, Nov. 30, 2006. (AP Photo/J. Scott Applewhite)

On March 1, The Wall Street Journal reported that the second largest bank in the country “is working on sweeping changes that would require many users of basic checking accounts to pay a monthly fee unless they agree to bank online, buy more products or maintain certain balances…

“Bank of America pilot programs in Arizona, Georgia and Massachusetts now are experimenting with charging $6 to $9 a month for an ‘Essentials’ account. Other account options being tested in those states carry monthly charges of $9, $12, $15 and $25 but give customers opportunities to avoid the payments by maintaining minimum balances, using a credit card or taking a mortgage with Bank of America, according to a memo distributed to employees.”


Quentin Fottrell of SmartMoney.com writes:

“This could be even worse than the debit card fee debacle, some contend. With the earlier $5 fee, customers could still choose to abandon their debit cards, but giving up a checking account really isn’t an option. Ironically, free checking accounts had been subsidized in part by the transaction fees charged to merchants each time a debit card was used, says Ben Woolsey, spokesman for CreditCards.com. Now that those transaction fees have been reduced, the subsidy is going in reverse: customer checking fees are being used to cover the cost of debit cards, he says.”

Those fees were reduced under restrictions imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Banks are insisting they need to find ways to make up for the resulting loss of revenue, but politicians and the public are pushing back. According to the Journal, shortly after the announcement of the new proposed Bank of America checking account fees, Massachusetts Secretary of the Commonwealth William Galvin issued a statement “slamming the reported plan and proposing a law that will bar the state from putting money in banks that put in place fees that hurt customers.”

Others observe that this could cause even more customers to move their accounts into smaller banks and non-profit credit unions, as happened last year after the Bank of America debit card fee fiasco, and at the urging of the Occupy Wall Street movement. The March 2 Los Angeles Times noted, “Consumers fed up with the rising tide of bank fees helped the nation’s credit unions more than double their number of new customers last year… More than 1.3 million Americans opened new credit union accounts last year, up from less than 600,000 in 2010, the National Credit Union Administration reported. That brings the number of credit union members to a record 91.8 million…

“‘We’re going to be playing bank fee Whack-a-Mole for the foreseeable future,’ Fred R. Becker, chief executive of the National Assn. of Federal Credit Unions said Thursday. Ultimately, he added, ‘people are going to switch’ to credit unions.”

On the same day that news of the latest Bank of America proposal came out, the recently created Consumer Financial Protection Bureau announced that the public can now  file complaints with the agency about alleged bank abuses of checking and other deposit accounts. This is the third phase of a system that already has handled more than 20,000 complaints about credit cards and disputes over mortgage foreclosures and billings.

Richard Cordray, director of the Bureau, said, “Deposit accounts play a critical role in the lives of most Americans, but these products and the laws governing them are complicated. Consumers need someone on their side to keep banks and credit unions accountable — that is our job at the Consumer Bureau.”

You can file a complaint at consumerfinance.gov. Or they can call, Monday-Friday, from 8 am-8 pm, ET:

(855) 411-CFPB (2372)
Español (855) 411-CFPB (2372)
TTY/TDD (855) 729-CFPB (2372)

You can also send or fax a letter to:
Consumer Financial Protection Bureau
P.O. Box 4503
Iowa City, Iowa 52244
Fax (855) 237-2392

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  • Taichi-wuchi

    Banks have to be regulated in order to have an equitable and just society.  People are dependent on sufficient income to survive in a capitalist system.   There must be a balance between the demand side and economics and the supply side of economics.  Without the demand side of economics there is no need for a supply side of economics.
    Sufficient capital is the only means to have a quality society. There must be regulation of prices and profits to accomplish a just and equitable society.  Random is not a rational way to manage an Economy because death and destruction is the result of failed economies.
    David Eddy 
    Social organization Specialist 
      

  • Two-decade BofA Customer

    I was a BofA customer from 1990 – 2011. Such “new” account fees are, in fact, nothing new. When I graduated high school in 1990, I opened a promotional account with BofA that required that I only bank at ATMs (newfangled inventions at the time) or else I would be made to pay a teller-usage fee. But, so long as I used the ATMs only, my banking with BofA was to be free for life. Eventually, however, through economic crisis after economic crisis (the US economy seems to face endless wild calamity), BofA exercised its right to alter its contractual arrangements. Service contracts, it seems, are never binding to corporations, only to their customers. My checking account fee went up and up until it was $12/month. Recently, they did give a break to their wealthier clientele — if you maintained a balance over $10,000, the monthly checking account fee would be waived. Whoever is reporting that such minimum balance requirements and monthly checking account fees are “new” propositions has failed in fact-finding and is just another ignorant shouter in the idiotic echo-chamber of  falsehood that is America’s for-profit corporate media.

  • Reverendblkgrape

    You fight back by moving to another bank. There are plenty and if they do it too move again.  With the amount of choices that are available and free as far as checking/savings accounts this is really a non-issue.  BOA is f****** themselves.  Think of it as harakiri.  I won’t bank with them so there.  point made.

  • Pension7ed

    Take your money to a Credit Unionor at least a local bank that will lrnd to local businesses.

  • Pension7ed

    That was LEND to local businesses.

  • http://www.facebook.com/profile.php?id=1491581775 Sandra Lee Larsen

    Does anyone  think that BoA would be so creepingly bold IF those who SHOULD have gone to jail during the crisis they caused, would have paid THEIR price??  Not likely!  Instigated move to credit union earlier, before earlier proposed reversed.  This institution’s ‘excuse’ that they are not a charity (in business to make money) is NOT valid, for their funding comes from fees other than checking accounts.  The brutal truth is that their cruelty is to ‘tax’ – make their dirty money – on the back of those – as they did earlier in the mortgage scams - least able to have this intrusion imposed.  Shame of continued war against most vulnerable amoung U.S. citizens, as is the intent of government with Medicare! 

  • guest

    B of A has been charging me $10/month for a checking account in California for years. Unless you have at least $10,000 in your account there has always been a $10/month charge for having a checking account. Chase Bank in CA has the same fee. What is new about this? Are there CA banks that don’t charge a monthly fee for having a checking account?

  • Davideros

    “that would require many users of basic checking accounts to pay a monthly feeunless they agree to bank online, buy more products or maintain certain balances…” They are experimenting with a number of plans including forcing you to pay a fee unless you do all banking online or take a mortgage with them or use heir credit cards… that’s on top of a certain balance…

  • Hartfordstuff

    I am always amazed by the banks that insist debit card fees are necessary to make possible free checking – when free checking was the norm long before credit/debit cards even existed. I remember when it was payment enough to banks to use the money in our checking accounts for free interest to them. They pay next to nothing for the use of our money in all accounts & cd’s these days while still charging rediculous interst on loans of all kinds – Loan Sharks doen’t begin to describe them. Keep the reform coming – keep the regulations coming – make usuary against the law again – not the business as usual.

  • GradyLeeHoward

    No free marketeer are you, David. Been called a socialist yet?
    What is happening is that tacked on fees and charges long endured by the poor and working poor are inching up on those who consider themselves middle class.
    It only goes to demonstrate that such self-respect is a myth, conditional on elite needs. 80 million of our hundred million American households lack any net worth, and therefore most of us are deadbeats in bankers eyes.