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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.

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51 Comments
Marty
December 06, 2012 at 11:16 am

I just got B of A to drop another bogus monthly charge for printing the picture of the check on my bank statement, a charge and option imposed by their decision to add the photo not by my request. They are already bumping up monthly statement to $15. I already fell for the "if you have 3 accounts your checking will be free." I don't mind paying for essential service, you should pay for service, just not get ripped off in the process.

Debi M
December 06, 2012 at 11:01 am

Free Checking and better interest rates are why I use a Credit Union. End of Story.

Davehd
December 06, 2012 at 10:49 am

I am, and have been a BoA customer since before they were BoA here in my area. That makes near 25 years. I have already told them last year that I would walk if they imposed fees. That would include savings, checking and my mortgage.

Phyllis
December 06, 2012 at 9:42 am

I personally would change banks if any fees were added, and believe many others would also. Most of us have been negatively affected by our economy---past time for banks and other big businesses to get a grasp on reality and realize their profit margins cannot be the same as they once were. The government needs to be streamlined and probably a lot of larger banks as well. Eliminate some of their hefty bonuses to officers! Middle class America is being charged and taxed to death! Enough!!!

hoosiermisfit
December 06, 2012 at 9:33 am

Wells Fargo has done the same thing - and not on a test drive. Banks are so out of control. But, they know they have you over a barrel because it's such a pain to change banks and the next bank is as bad as the other one.

Mikey
December 06, 2012 at 9:27 am

Banks have made money for many years on Loans, if we did not keep our money in the Banks there would be no money to loan, Who needs who?

Deborah
December 06, 2012 at 8:43 am

I am so tired of calling and finding out what to change to to avoid checking fees. I am on fixed income and every cent means something. As much as I would hate the hassle of chaning banks if fees became a big issue, I may have to. If they want to remain the largest bank and care at all about retaining customers, they should hesitate before increasing any more fees

Knine
December 06, 2012 at 8:22 am

@ cherry walker , your last sentence is funny? BOA is the biggest lobby bank for Dem's (that means they give your money away) if you are such a big fan you should have stayed and payed, hypocrit.

joel
December 06, 2012 at 8:10 am

i left bank of america and went to tcf they dont charge these charges and you can do your on line banking for free also got 200 for opening up a account

J Duval
December 06, 2012 at 7:31 am

The unfortunate truth is any bank or business that even touched the TARP money are dead entities. To big to fail means they have failed. Bank of America is a Zombie bank and as soon as it gets off the government Tit it will fail as it should have in 2008. You cannot piss off all of your customers by taking there money and then thumbing your noses at them and expect to do business with them later. The government did the right thing after the TARP money was handed out they required the banks to have enough capital so that they can be dismantled slowly at a later date using their own money. BOA will be one of the first of the Zombie banks to go.