BofA 'we are going to charge you more, because that is what you want....'

[The Straight Story]

Bank of America will begin testing a new slate of checking accounts in Massachusetts and two other states later this month in an effort to generate more revenue from customers.

The range of fees for the test accounts — from $8.95 to $25 a month in Massachusetts — will be similar to those for existing accounts, but the details and conditions will vary.

For instance, for the first time in years, the bank will offer a basic checking account with a mandatory monthly fee. But the bank will continue to offer ways to avoid the fees on other accounts, for example by maintaining a minimum balance of $2,000, using a credit card once a month, or linking an account to a Bank of America mortgage.

And Susan Faulkner, who oversees the bank’s deposit and card products, said the new menu of options also better matches what customers want, and therefore helps the bank retain and attract customers.

“When you provide value to customers, customers come back and stay with you,’’ Faulkner said.

http://www.boston.com/business/articles/2011/01/06/bank_of_america_testing_fees_in_mass/

[Vinca]

1. 3 words: move your money. Assuming you have any.

[The Straight Story]

2. Don't have any, have a netspend card and nothing more (nt)

[xor]

6. I had a netspend account for a bit...

I used it mostly for online stuff, that way I could keep it all separate from my real bank accounts. They hit you with those dollar per every transaction fees if you don't pay the $10 (or something) monthly fee.

[The Straight Story]

8. I have direct deposit so they waive fees (nt)

[xor]

15. Oh, I didn't know they did that with direct deposit..

Good deal then, aye? I know I never had any problems with them for the limited usage I had.

[FBaggins]

3. They're just the first. Coming soon to a bank near you.

I'm no fan of BofA, but it's silly to pretend that this isn't going to become the new norm post-Dodd/Frank.


It isn't even all that unreasonable. Almost all checking accounts used to have monthly fees unless you maintained a compensating balance. Those fees started to go away as banks shifted their fee income away from these charges and into overdraft penalties (etc). That hurt some people (those who couldn't manage their accounts), and helped others (those who couldn't maintain high balances, but could at least balance their checkbooks).

Lately, there's been a huge uproar about the overdraft fees, and many of them have been legislated away. Of course the banks are going to go back to the way things were.

[MadHound]

12. Only if you do your banking with large regional or national banks,

Small regional or local banks still have to earn their money the old fashioned way, by pleasing their customers. I suggest you move your money to one of those.

[FBaggins]

17. In the long run, I doubt it.

Their fees will no doubt be lower, but most of those smaller local banks used to charge a monthly fee for their checking accounts as well (unless you had balances and/or services that compensated for the lack of a fee).

For the record, the "old fashion way" wasn't just "by pleasing their customers"... that's how they GOT/KEPT customers. The way they earned money was by charging more in interest for their loans than they paid in interest on their deposits. The problem is that the interest "spread" - while it has begun to climb again - has been shrinking for decades. It isn't anywhere close to the level it was at back when most banks got rid of the monthly account fees.

The other thing that most people don't recognize is that (back then) many of those banks didn't expect to make much of a profit from bank operations. Their goal was to grow as quickly as possible (by paying you more interest than they could truly afford and charging you less in fees/interest), then sell out to a larger bank. The owners of the little bank would make their profit in the sale of the bank. That game ended well over a decade ago (though it took a few years for some of them to realize it). Bank mergers are starting up again, but the larger banks aren't paying the same premiums they once did.

[sarcasmo]

14. Really? Let's say they get a 5 dollar fee from 1million customers.

5 Million dollars pure profit, and that would be per month.

[meegbear]

4. I dumped them a few years ...

Two events:

1. Was working for a company that paid once a month (ick) on the 15th. My monthly statement was processed on the 18th, so I would always have enough money for free checking. Without notifying, they moved it to the 12th, so I would be charged.

2. I had two credit cards with them, with some good money on them. When the bankruptcy bill went into effect, they "retroactively" upped the interest on both to 31%! I had to goto into debt consolidation to pay them down.

The other card was Chase (29%). When I did consolidation, they sent me a letter saying we understand, closing the accounts, etc. BoA also sent a letter we understand, closing the accounts and I should really learn how to handle finances better.

I waited for my local credit union to have online banking before switching. When I went for my mortgage, my sister was helping me get everything together (she's a paralegal for a real estate lawyer.) I told her I do not want a mortgage with them. She said she'd rather get me a Ditech variable adjusted one than to get me one from them (got Wells Fargo).

They deserve to fail! Can't wait for the Wikidocs.

[EstimatedProphet]

11. Yep. Credit unions don't pull that crap.

[MilesColtrane]

19. I was out on them after it was revealed that Ken Lewis...

hosted an anti-Employee Free Choice Act conference call with his buddy CEOs of other corporations.

http://www.huffingtonpost.com/2009/01/27/bank-of-america-hosted-an_n_161248.html

[xor]

5. Love how they charge more money to the people who can least afford it...

but give those who can afford it a pass. Seriously though, if you're out of work and don't have any income coming in, those $10-$15 a monthly charges do have a real impact. Might be easy to write it off if know you'll be getting a $1600 deposit in a couple weeks, but not cool if you only have money going out and not in.

[FBaggins]

9. We can blame the people who can't balance their checkbooks.

If you average just a few hundred (or less) in your checking account, but knew how to manage your money, the bank was always losing money on you. You could access your account and pay your bills online... you could use your debit card anywhere for free (including cash-back transactions). They took care of collecting your deposits. etc.etc.etc.

The cost to provide those services (plus maintain your share of branch locations/tellers/whatever) isn't covered by the interest they earn by loaning out your deposits to others. IOW... they were losing money on you... and they were perfectly willing to do it because <b>some</b> customers would overdraw their accounts and pay a ton in fees.

Over the years, they made it easier and easier to end up with your account overdrawn (and those fees went up and up), but it was still entirely within your power to avoid paying them. All you had to do was not spend money until you knew it was in the account. Your grandma used to do it without a problem.

Now those fees are going away and the banks are shifting back to the way things used to be. You need to keep enough money in your account that the interest they earn on it pays for the account... or you'll pay the fee directly.

I predict that the responsible majority will soon look back on the old fee structure and miss it.

[woo me with science]

7. People are being sucked dry.

Nickels and dimes. It is steady and deliberate.

[hobbit709]

10. Did they ever ask the customer?

HA!!

And how many people today can afford to leave a balance of $2000 in their account.
Most of the people I know are lucky to have $20 to spare.

[sarcasmo]

13. I have already had a couple of friends pull their money from these scumbags because of fees.

GREED is the only word.

[WolverineDG]

16. How I long for the day I can move my mortgage away from those vampires

I was with Countrywide, which I know some folks had issue with, but at least they would accept partial payments. BoA refuses to do that. Fuckers.

dg

[Broderick]

18. Seems everytime

I got away from BOA they found a way to meander back in to my life. LOL

[MilesColtrane]

20. That's what happens when you don't break up companies that get too big.

They swallow up all competition, forcing you to end up doing business with them.

[FBaggins]

21. You're kidding, right?

I mean... I get that BofA is massive. But we can't pretend that all the competition is gone and we're stuck with them.

Can you name any industry that has more competitors than financial services? There are literally thousands of places where you can get a checking account.