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<p>That and they also wanted to stop the bleeding - one bad news story after another about the fees - day after day.</p>
<p>Like the other banks they’ll figure out some other way to make up the revenue they appear to be forgoing.</p>
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<p>What in the world gives you that idea?</p>
<p>^^ because banks are a business and only profitable businesses stay in business.
Economics 101</p>
<p>so… the free market worked. Imagine that.</p>
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I don’t believe this is true. If it was, BOA would keep the fee in order to drive out all the accounts they lose money on.</p>
<p>I bet they are making plenty on the other fees they are charging small account holders. They attempted to add another fee, and for some reason this one pushed a very hot button.</p>
<p>Banks don’t have a right to make a profit; no business does. They have a right to try to make a profit, and I have a right to take my business someplace else.</p>
<p>Of course, as we saw in 2008, these guys don’t exactly play by the rules of a free market. They have a special capitalism-socialism arrangement, where profits go to the bank, its shareholders, and its top executives, while losses go to the taxpayer. “Too big to fail” is a dangerous thing, and I’d think that free-market proponents would be horrified by the erasure of the risk in the risk-reward of capitalism.</p>
<p>Headline from the November 1 American Banker: “Debit Fee or No, Megabanks Must Lose Marginal Clients”.</p>
<p>The article quotes banking consultant Mike Moebs who indicates that “operating a checking account costs megabanks between $350 and $450 a year: at least $100 more than it would a smaller institution. While its possible for a small bank or credit union to eke out a profit from such customers, that’s not feasible for institutions such as Bank of America”. Concerning megabanks, he advises them to find single-service checking account households and charge them more. </p>
<p>Bank of America’s CEO speaking told analysts during the third quarter earnings call: “The issue is, when people split their relationship and use our convenience and our access and our 18,000 ATMs and our no foreign-ATM fees and our online banking product and all that, and yet have their relationship elsewhere, that is tough for use to afford to provide.”</p>
<p>From my perspective this article only confirms what has been well known among most business people for 30 years: the 80/20 rule holds. Businesses earn 80% of their profit from 20% of their customers. Based on the costing numbers above, you need approximately $8000 in balances for a breakeven account.</p>
<p>^^ yes unless the customer has a mortgage with the bank.</p>
<p>Which is why BofA did not announce they were dropping the $8.95/month charge for customers who have ATM/electronic/online only accounts who come into the bank and use teller services. Or the $12/month fee for customers who have regular checking accts but dont meet one the fee waivers.
Or the $5/month automatic deduction from savings accts that dont
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<p>Could it be that BofA never really planned to institute the debit card $5/month charge for point-of-purchase use??? Was it all a clever plan to keep the media and their customers from seriously looking into BofA’s other monthly fees??</p>
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<p>“Never ascribe to malice that which is adequately explained by incompetence.” - Napoleon Bonaparte</p>