Banking Blog

Finance Blogs » Banking » BofA backs off checking fee hike

BofA backs off checking fee hike

By Claes Bell · Bankrate.com
Wednesday, December 5, 2012
Posted: 7 am ET

A little more than a year since the original bank transfer day protest took aim at Bank of America's controversial debit card fee, it looks like the megabank is backing away from another checking account fee increase.

Since early last year, Bank of America has been running a pilot program in Arizona, Georgia and Massachusetts. Customers in those states have been charged a flat monthly fee of $6 to $9 for basic checking services, and the idea has been that if the experiment worked, it could be rolled out nationwide.

But the bank looks to be putting the fee increases on hold for now, writes Shayndi Raice and Robin Sidel in The Wall Street Journal:

Bank of America Corp. has shelved plans for new fees that could have hit at least 10 million customers by the end of this year, skirting a potential replay of a 2011 uproar over consumer-banking charges.

The decision to hold off on new checking-account fees at least until late next year comes amid a sweeping review of the bank's retail-banking business, said people familiar with the bank's plans.

While checking fees are obviously nothing new, what's unique about BofA's Essentials account is that it charges an unavoidable flat fee for basic checking. Most megabanks have imposed a monthly maintenance fee in the last few years, but they've also offered some kind of path to avoid it, such as by keeping more money in your account, signing up for direct deposit, etc. While Bank of America is still offering accounts with those kinds of fee waivers, even in the states running the pilot program, customers who chose an Essentials account have had to pay the fees, end of story.

From BofA's point of view, having to tiptoe around fee increases must be a little odd. It wasn't that long ago that people essentially didn't care about banking fees, and it's probably strange that charging money for delivering an important service would be a hot-button issue. But customers have been conditioned to expect free checking, and getting people to pay for something they're used to getting for free can be really hard. Just run over to your local newspaper and ask how their online paywall is going.

That's why I think Bank of America's caution is warranted. Thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act, and changes in Regulation E, more transparency in checking costs may be inevitable. But it doesn't seem smart for Bank of America to take the lead here. The backlash from the company's $5 debit card fee debacle is still a little too fresh, and it's smart for BofA to wait for other megabanks to make similar checking changes so it has a little cover if it wants to move  forward.

Sure, the bank will lose some customers to higher fees, but most customers will stick with BofA because changing bank accounts takes a little more legwork than a lot of people are willing to do to save $6 a month.

What do you think? Should Bank of America be hesitant about raising fees on customers? Would a $6 to $9 per month fee make you switch?

Follow me on Twitter: @ClaesBell.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
51 Comments
Barbara
December 06, 2012 at 12:42 am

I've been paying BOA $25.00 a month forever.....for a maintenance fee?? I am not even using checks anymore... Anyone else paying this amount? I have a mortgage, and credit card with them also. I am a senior.

Kathy H they charged
December 06, 2012 at 12:38 am

My late husband had a BofA account. when He passed I closed the account.(so I thought) It took BofA 3 monthe & 2 visits to the bank to finally get it closed. in the mean time they continued to charge me fees!!! on an account that that had a $0.00 balance. I had to pay $120.00 plus other fees to finally close the account they refused to wave the fes!!!needless to say I will never bank at BofA. I tried to get my husband to change banks for years before he passed because of the massive fees. The bank I bank at has NO FEES, free checking, free checks etc.

Bobbke
December 06, 2012 at 12:19 am

I switched to a Credit Union. Better rates and service. I'm glad I did.

Preston Edwards
December 06, 2012 at 12:16 am

Bank of America ripped us off and ied to us 10 years ago over an auto loan. They have been fined every year for the last few years for some greedy violation. Stay away from them . I have no trouble with BB&T.

Carson
December 06, 2012 at 12:02 am

About the fees, I was charged for the checking and the saving account in the past. But I did call customer service and spoke to the staff. Customer service was awesome and removed this service immediately. I don't believe in charging fees to customers due to the interest already being charged . Let's see if they charge $6 a month that's $72 a year. $9 a month that's $108 a year. This is not favorable to me at all!. Bank of America, please "DO NOT CHARGE THESE FEES".

Don
December 05, 2012 at 11:47 pm

New fee = New bank or credit union, especially since the way I have been lied to and used by Bank of America!

John
December 05, 2012 at 11:28 pm

Just another reason to bank at a Credit Union that isn't looking for profit simply covering costs of doing business. Most common services are free and even some uncommon services. Not only that but they're local and know you when you come in.
I'll use banks for credit cards if they have a good deal but for regular banking services, forget it.

Sharon
December 05, 2012 at 11:23 pm

Banks make money from the money we deposit in our accounts. Why should we pay a bank a fee to make money with our money!? This is insane. Corporate greed at it's best.

ruth milcarek
December 05, 2012 at 11:21 pm

any bank that you have to pay them a monthly fee when they use your money for loan outs, I definitely would go to a different one. You should get interest on the money you put in the bank, not be charged for having your money in there. That is how they make so much money off your money. Wake up people and speak out.

Cindy Miller
December 05, 2012 at 11:21 pm

Maybe in the past I would have stayed put ... but if B of A decides to implement their fee I'll take my business elsewhere.