Bank of America Declines to Impose New Fees: for now

As reported in the weekend edition of The Wall Street Journal  (Saturday/Sunday, December 1-2, 2012), written by Shayndi Raice and Robin Sidel:

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.

Many other big banks, including J.P. Morgan Chase & Co. and Wells Fargo & Co., have rolled out plans that aim to raise fee revenue or push customers to do more business with them as low interest rates, slow economic growth and tough new rules limit bank profits.

But the fees are unpopular with customers, regulators and many legislators, who see them as aimed at consumers who lack for low-cost options in handling their finances.  Levying new charges opens banks up to criticism that they are punishing lower-income customers with policies that encourage users to hold larger balances and use multiple products.  However, in choosing to delay new fees, banks risk alienating investors who want to see more revenue.

“Banks cannot continue to be on the front page,” said Paul Miller, an analyst with FBR Capital Markets, who added that holding off on fees is a smart move from a public-relations perspective.  At the same time, “low-balance depositors don’t have a lot of money for you to make money off of.”

Okay, I am a low-balance depositor.  But I am smart enough not to bank with the big banks.  Their fees are too high and they are more concerned about satisfying investors than serving customers.

If you are a Bank of America customer, beware.  More fees are coming, more fees are coming!!


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