Bank of America's 'sneaky' new fees: An outrage?
Bank of America is working on "sweeping changes" that would levy new fees on customers with checking accounts, The Wall Street Journal reports. Proposed fees, ranging from $6 to $25 a month, could only be waived if customers meet certain requirements that favor the bank — by keeping a minimum balance, taking out a mortgage, or switching to online banking. The report comes months after Bank of America withdrew a proposed $5 monthly fee for using debit cards, after suffering a backlash from customers and lawmakers alike. Unsurprisingly, the new fee plan is already being slammed: Sen. Richard Durbin (D-Ill.) calls it "a challenge that cannot go unanswered." Is the bank's scheme outrageous?
Of course. Banks are extorting customers: It's bad enough that BofA tried to instate the $5 fee for debit card users, says Hamilton Nolan at Gawker. But the new fees — driven by the struggling bank's "insatiable need for sweet, sweet money" — are even "sneakier." And BofA is neglecting an age-old principle of finance: Banks use customer deposits to make loans to others, which in turn results in profits for the banks. It's "ridiculous" to charge customers for providing banks with the capital that is essential to their business.
"Bank of America unveils new, stealthier fees"
But banks have a right to turn a profit: "Banks aren't charities," says Pallavi Gogoi for the Associated Press. They are "public companies and are expected to make a profit somehow." Making money is "not as easy as it used to be." With the Fed encouraging ultra-low interest rates, banks are seeing their traditional profit source dry up. New government regulations have curbed other banking fees, and banks are scrambling to make up for the loss of revenue. Let's face it: "Nothing in banking is free anymore."
"Even after backlash, banks quietly pursuing fees"
Regardless, don't expect BofA to back down: "There's new backbone" in the country's biggest banks, says Linda Stern at Reuters. They realize that they just "can't afford to keep" some customers, particularly those with small checking account balances. So they're growing bolder about charging fees, and "if those customers find other financial services to use instead of banks, so be it." But if "you like the convenience of an ATM on every corner and a great online bill-pay application, you may be better off sucking it up and paying the monthly bank fee."
"When your bank doesn't want you"