March 1st, 2012
Bank of America Tests New Banking Fees
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As predicted after the banking fee debacle of 2011, big banks are searching for more ways to generate revenue from their customers.
The first to step forward with new fees is repeat-offender Bank of America, the second-largest bank by assets with more than 55 million U.S. households as customers. Last year, the bank’s proposed $5 debit card fee led to a media backlash and, eventually, a revocation of the proposed fee.
Now, the big bank is back at it.
What are the fees?
Bank of America is testing a couple of fee structures, reports The Wall Street Journal. First, the “Essentials” checking account may come with a $6 to $9 flat fee with no qualifying actions to get you out of paying the monthly fee. Second, checking accounts with monthly charges of $9, $12, $15 and $25. The difference is that these accounts will come with ways to avoid the fee, such as maintaining minimum balances, signing up for online banking, using a Bank of America credit card, or getting a mortgage with the bank. These fee programs are currently being piloted in Arizona, Georgia and Massachusetts.
Why are banks testing new fees?
These pilot fee programs are likely the first in a trend of new banking fees. U.S. banks collected $8.67 billion in the fourth quarter of 2011 on service fees charged to savings and checking accounts. That may sound like a lot, but that number is 16 percent lower than it was two years ago. As the Credit Karma Blog has previously suggested, the 2010 Dodd-Frank Wall Street Reform Act is forcing banks to scramble to find new ways to make up the significant revenue lost from the Act’s regulations.
Bank of America is probably just the tip of the iceberg. Other banks—big ones that are most affected by the new regulations—will likely follow suit. After all, around the same time that Bank of America announced its now-annulled $5 debit card fee, Chase proposed a $3 fee of its own (also now a thing of the past).
What can you do?
If you don’t want to wait for new fees to arise, there are still currently some free checking account options. Watch this video for a few suggestions of where you can go to bank for free:
Have a Karmic Day!
Bethy Hardeman, Social Media Maven