<p>LOL, bay-- the twists and turns of this thread and its length make some discussions hard to follow. My issue with BOA is that they are awful to their customers (see my previous post about their awful treatment to a widow and the general counsel of the state bar). I also in general find debit card fees unacceptable, and when my bank did it (I banked with Wachovia and was very happy. Now that they are Wells Fargo, not so much). they tried this test case debit card fee, and my state was one of the “test” states. No thanks. Whether or not I have to pay the fee is only partially the issue. I don’t support it and will not carry a debit card. My DS feels the same, and since they gave me inconsistent replies as to whether his debit card will or won’t have a fee (since its still linked to our account) he will simply dump it and get an ATM card. Period. </p>
<p>When I first opened some of our higher service accounts with Wachovia, they required us to have a 10K line of credit in order to have the fees waived. So we did. We never used it. And at some point as the banks got freaked out about customers with open lines of credit, they removed the line of credit. Fine. Didn’t need it. But then if they take it away they cant then charge for the things that were free with the line of credit . Thats an example of what feels like a bait and switch.</p>
<p>At Wells Fargo, the minimum balance across the accounts, in order to avoid the fees, is something ridiculous like $25K. That does NOT include the business accounts. Thats a lot to have to keep in a bank that pays little or no interest.</p>
<p>** edit** In fairness, they did give me some literature on an interesting sounding investment opportunity that would help meet their average daily minimum balance requirement. Will have to get DH to look more closely at it. If we had a mortgage with them, that would have met it, but, no mortgage.</p>
<p>For those interested in closing their B of A accounts: I went into my branch today to ask a couple of questions about the process, and the young man was very interested in what I had to say about all of this. He said they’ve been told pass along customer comments, so be sure they know why you’re leaving.</p>
<p>The reason that I gave him: So B of A has lost a revenue stream, which is a problem for the entire bank. I resent that only small depositors are being asked to fix the bank’s problem, whereas large depositors and especially bank executives are not being asked to contribute a penny.</p>
<p>Banks make money primarily through interest on loans. Large depositors provide a bank with money which it can then lend out at a profit, and the profit more than covers the cost of servicing the account. Small depositors cost the bank just as much money to service but do not provide as much money to loan out at a profit. To recoup its costs, the bank needs to charge fees - either directly on the depositor or indirectly on the merchants with whom the depositor deals. So yes, when one type of fee gets cut by government fiat, the bank needs to find another way to cover its costs. Completely logical - and fair, IMO.</p>
Cable tv was never free. The cable TV people never ran ad campaigns touting their large network of free machines, training me to never walk into the store and use their flesh-and-blood employees. The cable TV people didn’t get me to change the way I bank and manage my cash.</p>
<p>This is a bad analogy anyway. Charging to use my debit card is more like the cable TV company suddenly deciding that if I watch my local station at some point during the month, they are going to ding me for 5 extra bucks, in addition to my cable bill.</p>
<p>
Many banks do charge for their services. I was reading that 10 years ago, 90% of all checking accounts were free. Now it is more like 35%. So banks have raised their prices. Most charge ATM fees, and guess what? It changed how I use them. I now only hit them once or twice a month and take out more cash, or I get cash back at a store (no one charges for that yet).</p>
<p>The restrictions on fees came about because of the rise of fees as more than an incidental part of the banks’ revenue stream. They got greedy and abusive, and got smacked down. And they deserved it. A $35 overdraft fee bears no relationship to the actual cost of providing the service plus a profit margin. And deliberately rearranging your daily transactions to generate multiple fees per day is just outright fraud IMO.</p>
<p>And I don’t believe for a second that at 21 cents per debit card transaction, the banks are now losing money. They will still make billions.</p>
<p>Ten years ago, there was a lot more competition in banking, and interest rates were higher, so that banks could subsidize checking account servicing costs from the interest rate spread.</p>
<p>When our cable tv bill went UP but at the same time they were offering VERY reduced prices for new subscribers…we left cable entirely for internet…and reduced our TV coverage to basic cable. We politely asked why we (long term subscribers) weren’t being offered the same price break that the newbies were getting. After we cut the computer access and reduced our cable TV to basic, guess what…about a month later we got a “come back offer”. NOPE we didn’t go back.</p>
<p>The little guys are being asked to support everything. In CT, Anthem BC/BC recently asked for a 13% rate hike for 25,000 individual policy holders. They claimed that these policy holders were costing them too much money. Now keep in mind there are tens of thousands of other Anthem policy holders…and NO increase was being asked for them. These individual policy holders are folks who work in jobs where there is no insurance provided…or are young folks who have aged out of being able to be on parent plans. In many cases they have high deductibles, and premiums aren’t exactly a bargain either. Most are VERY healthy low risk customers. So…say they pay $2400 a year for their “insurance” and have a $3000 deductible? Unless they have an expensive medical issue, it is likely that the insurance company didn’t pay a nickel of their costs. The insurance commission here gave Anthem a 4% increase for these…much more reasonable.</p>
<p>I know I’m digressing but it seems that the way to fix the financial woes is to attach fees or added costs to those who can LEAST likely pay them easily. What’s that all about? Customers with small amounts of money in banks usually have small amounts for a reason. The new B of A fee won’t impact folks with $20,000 average daily balance, or who have a mortgage with the bank. Clearly this won’t be the case for many small deposters…including my two kids. So…BYE B of A.</p>
<p>I’m sure the agreement we signed with BofA when we opened our accounts included the following language: “Terms and conditions subject to change without notice.”</p>
<p>
</p>
<p>No, they are being asked to pay for a service they are using, like everyone else.</p>
<p>A new bullet point for the OWS list:</p>
<p>“We demand that all banking services be provided for free, regardless of the size of our deposits.”</p>
<p>Well, I think it is debatable whether the charge really is a fee directly related to the cost of a service, or is just a fee that BoA thinks it can impose profitably.</p>
<p>My understanding–which well could be wrong, I admit; I am not an expert here–is that the credit card reform legislation limited what banks could charge people who either carried a balance on their credit cards or were late paying their credit card bills, and so fees like BoA’s debit card fees are an attempt to make up some of that lost revenue.</p>
I’m glad, jym626 “oldbie” (as if the number of posts is relevant to anything) that you’re not getting dinged by BofA for the fees. Neither am I because I’m not a customer of theirs either and given that they charge a lot of fees, there’s no way I’ll become one as long as I have better options available to me. It sounds like whichever financial institution you’re using is more agreeable on this point.</p>
<p>Some of these banks need to realize that some of the customers they turn away, including the small depositors, will likely stay away and that some of these people who are small depositors now, including college students who have not yet embarked in their careers or small businesses just starting out, may well stay away from them even once they become large depositors at a competitor’s financial institution. Some of the banks might be short-sighted in this regard.</p>
<p>Totally agree with almost all of your above post, ggg. Banks should recognize that the small depositors of today may well be the big depositors of tomorrow, and establishing a good relationship with them is a smart business practice.</p>
<p>As for the one point of disagrement - yes, the number of posts is quite relevant. It is not too common that someone “new” pops onto a college website to chime in on a side discussion in the parents cafe. Enough said on that point.</p>
<p>OK, I went to my local BofA branch office and had a chat with a nice young man (recent college grad) about the changes to my joint (D and me) BofA checking/debit and linked savings accts.</p>
<p>First the reason I received 2 different letters is because I live in a state different than the one in which the BofA accts were established. I setup the accts at a BofA branch that is close to my house but in a different state. Soooo . I received a letter outlining the changes for BofA accts in my state and another letter outlining changes for accts in the neighboring state.</p>
<p>BofA has or soon will have 3 types of checking/debit accts. The first is basically an ATM/electronic/online only acct. All banking business must be done either at an ATM or online. A customer with this type of acct will be charged $8.95/month if they go into the bank for ANY service that can be done at an ATM or online. The $5/month debit card use at point-of-purchase applies to this acct.</p>
<p>The 2nd type of checking/debit acct has all of the BofA customer services BUT will be charged a $12/month fee unless you meet one of the fee waivers.
The $5/month debit card use at point-of-purchase applies to this acct.</p>
<p>The 3rd type of checking/debit acct is their Gold/Advantage acct which has all of the checking and debit card services w/o any fees. If you have a mortgage with BofA or maintain some ridiculously high balance (25K, I think) in at least one of their accts all of the fees including the monthly debit card usage at point-of-purchase fee is waived. </p>
<p>For the linked savings acct unless you have the Gold/Advantage checking acct or
A $5 fee will be automatically deducted from the acct.</p>
<p>Some customers could be looking at $22/month in fees if they have a regular BofA checking/debit and savings accts. :eek:</p>
<p>The banking law change in question was inserted by Sen. Durbin (D-IL) at the request of retailers, with WalMart supposedly leading the charge.</p>
<p>Every time you/I use a credit card or debit card at a retail establishment, the retailer pays a fee to process that transaction and to receive the funds electronically. (The fee is based on retailer volume. For example, bank credit cards can total 3-4%; Amex can be 6-8%.) The law caps the debit cars fee at $0.22 (I believe), plus a small % for bad debt. Thus, instead of a retailer like WalMart paying the old rate ($0.44 per debit card transaction) – and think of the millions of transactions that occur every day – Walmart will now pay only $0.22. In essence, bank revenues have been cut in half for this debit card service. (Whether they were making inordinate profits on electronic payments is another story.) So, to recoup this loss of revenue (and perhaps even make more profit than before), banks are now raising the cost to the consumer. </p>
<p>btw: retailer profit goes up (since their transaction fees goes down), but whether they pass along those extra profits to their customers… :)</p>
<p>So does this mean my son will now have to pay $8.95 if <em>I</em> deposit money into his account using a teller…guess so. AND in addition would be paying $5 month for point of purchase debit card use? Lovely. They already made a change similar to this about a year or so ago. They were going to charge a fee if a teller was used…but my kid has direct deposit (doesn’t usually equal $250 a month even though it’s done weekly as it’s for his “salary” portion of a table waiting job).</p>
<p>Well…the WHOLE purpose of us having a B of A account was so <em>I</em> could go to a teller and deposit money into my kid’s account. I’m sure they will say “Lady…just open up an account with us…and you won’t have to pay this fee”…that isn’t going to happen.</p>
<p>I went into my B of A bank today to ask what new fees I was getting. First they said, don’t worry about a thing, even though you wouldn’t qualify for our best account today, you’re grandfathered in, so you don’t get any fees. And as far as the ATM fee, nobody should worry about that because that is not set at all and may not be coming for anyone. I suppose they had such a big hubbub about it, they very well may just retract it. So honestly, I wouldn’t panic about that right now, no matter what kind of account I had.</p>
<p>busdriver, I can’t speak for anyone else, but I’m not “panicking” about the fee. “Irate” is what I am. To me, it’s just another example of how the game is rigged, and it’s one of the few cases where I can do something about it.</p>
<p>My B of A person didn’t say anything about grandfathering, nor did he say the fee is not set. When you say “ATM fee” do you mean using the actual ATM? Because they haven’t said anything at all (yet) about that. If you mean the $5 debit card fee, the CEO was pretty clear that he has no intention of withdrawing it (although, like Netflix, they obviously didn’t expect the blowback, and could always reverse course).</p>
<p>LesMa, B/A was very clear that they were going to “roll out” the $5 fee in selected states, but they didn’t say which states they were. So it may very well be that the reason there seems to be conflicting info is state-specific.</p>
<p>If they are doing it on a state-by-state basis, there may be an array of other factors going into the equation, both in terms of state banking regs and B/A financials.</p>
<p>calmom, I’ve never heard anything about B of A charging the fee in selected states. It does look like the roll-out date might vary, because I found plenty of phrases like “early next year,” “phase in,” “soon” – but nothing about exempted states. When location is mentioned at all, it indicates that the fee is nationwide, like this:</p>
<p>Googling “debit card fee, grandfathered” turns up nothing (except real grandfathers). busdriver’s account may be exempt because he meets the $20K-or-mortgage requirement for waivers.</p>
<p>BTW, B of A is still pushing debit cards on their website, touting the “Keep the Change” and “Add it Up” programs, as well as myriad other benefits. No mention of the coming fee:</p>
<p>Exactly, and don’t forget that BofA grew by acquisition/merger. Many of the banks it acquired had its own rules and promises to customers, of which they must honor under whatever agreements were in place at that time (and until those agreements expire). Thus, what BofA can charge its long-time California customers may be a lot different than what it can charge its NE (former Fleet Bank) customers or it’s North Carolina customers.</p>
<p>And each of those banks (NationsBank, “old” Bank of America, Fleet Bank) had acquired other banks with legacy and grandfathered agreements and promises.</p>