No, what is kind of funny to me around bank fees is that everybody enjoyed the free, cheap or otherwise subsidized bank services offered in a business model based on maximizing the opportunity to generate fees off of poor people and people incompetent at handling their money.
Then being outraged at such a system and passing regulations to prevent (or seriously curtail) that business model but still expecting the same free, cheap, or otherwise subsidized bank services even when it is no longer necessarily in the bank’s interest to encourage high transaction volumes by low balance account holders.
Doesn’t change the high level of douchery in the industry (I’m in the industry (though not actually a “banker”), and trust me, we’re a bunch of douches), but the outrage over what Dodd-Frank is resulting in isn’t all that sensible either.
Like was said early on, he left the “try” out of “has a right to try to make a profit”.
BoA doesn’t have any obligation to justify their policies as if they’re some sort of governmental agency; their customers are completely free to leave and go to any of their competitors or even someone like a local bank or credit union.
That said, I think that the way they’re doing it sucks; they should have levied the charge up front when debit cards became popular and widely used 5-10 years ago.
Doing it at this point points out just how much of a naked money grab the policy is; they’re doing it because they can, and because they believe the costs of switching banks is perceived as higher by their customers than the $60 per year for the debit card fee. Sort of the antithesis of customer service if you ask me (“let’s see how much we can screw our customers before they leave!”).
Really and truly, banks that have to resort to crap like this must suck at the whole banking thing; they’re supposed to make their money by investing deposits, not by charging account holders fees. This way seems like double-dipping; not only do they get the advantage of earning investment income off of my balance, but they get to charge me for the privilege as well.
They do still make money this way too. However, they don’t (and can’t really with what they can currently charge for loans) make money this way off of people who keep a revolving $800 in their checking account (which is why if you go back 20 years before debit cards were widespread checking accounts were rarely “free”). The cost of mailing you a few monthly statements (let alone other servicing costs) will eat what profit they would make loaning out that person’s money. Especially during a time of government/regulatory policies designed to keep the cost of money low.
Even financial advisors can have problems with self control, so there’s nothing obviously wrong with putting up sensible barriers to keep oneself in compliance with long-term goals. Just as someone wishing to lose weight may not keep sweets in his house, someone who has a tendency to spend too much may wish to restrict access to easy credit.
My older brothers both had debt problems; my father was a compulsive gambler; so I don’t carry a credit card for similar reasons. Doesn’t make me bad with money or a “stupid dipshit”.
That said, we’ll see how this turns out. I think my current bank is planning something similar and I may well switch to a credit union for that reason; we already pay for the privilege of letting them keep our money and all this adds up.
How is this going to create jobs again? It might lose jobs if people move their accounts of of BoA because of it. What other products do you want to pay more for to help the profits of the supplier?
Isn’t this good because it exposes the prices banks charge for these services to consumers? What was paid before was factored into the price of merchandise so that people like me who don’t use debit cards have to pay it anyhow. Now banks, while still making a profit on transactions, can see how much customers are willing to pay for the service, and if they can compete with other suppliers. It is pretty funny for high level capitalists to complain about being forced to compete on a level playing field.
Level playing field? Dude, the retail lobby just got a huge plate of money handed to them ( a silver plate of it, really) and you think it’s some kind of consumer victory? How is it any of your business if the retailers choose the pay the interchange fees - which they did until they went and cried to the government.
You won’t end up winning this one. What wil happen is that you’ll be paying fees. It shouldn’t come as any surprise, and there’s no reason to get grouchy over interchange fees being loaded into prices as opposed to, say, the cost of the building overhead or plastic bags.
Even more importantly: profits do not create jobs. If you’re making more money without doing anymore work, why the hell would you be stupid enough to invest in more people to that less work?
This is the kind of decision where they are counting on people to quit, but for the end result not to matter because the increase in revenue will make up for it. That means fewer jobs.
And don’t forget that the reason for this recession and thus lower jobs lies squarely on Bank of America’s shoulders. They don’t get the benefit of the doubt anymore. The only reason they still exist is that we gave them our tax dollars. So, no, you don’t get to fleece your customers because the government made a reform you don’t like. If you don’t want government interference, don’t fuck up the system.
And when you have horrible PR, you don’t start doing more things that people will dislike. And you definitely don’t try to make people feel guilty and shame them into using your service, as this cunt of a CEO is doing. You don’t want people to be unhappy? Then don’t do something that anyone with even a quarter of a brain would know would be unpopular, especially when your good will is spent.
And don’t tell me you can’t get by. We gave you money. If you were too stupid to use it correctly, then you deserve to fail.
I’m not commenting on whether it is good or bad. I fully support almost all of the financial reforms that were passed.
I just saying that it isn’t sensible to significantly alter the ecology in which a set of services exist and their pricing and yet expect the services to remain unchanged. Which is apparently what a lot of people expected.
And under the previous system they found out how much their customers were willing to pay, there’s more than one customer involved in a debit card transaction other than just you and your bank. Those stores that CHOSE (this is why my mom never accepted credit cards at her shop, she was unwilling to pay the transaction fees) to put POS terminals in their businesses in exchange (presumably) for more customers were paying a price or opting not to get the service. They’re the ones who went to the government to pass regulations guaranteeing them with a service for less than they were willing to pay.
The retailers dealt with only a very few debit card suppliers, which, since the retailers felt required to accept the cards, had a near monopoly position. Now the retailers have low overhead, and, since there are a lot more retailers than debit card types, we as consumers have a much better chance of getting some of it back. I believe in competition, how about you?
As for me, I have a mortgage with my bank and lots of money in my account, and I don’t pay fees and don’t expect to pay fees in the future. Others can move to a credit union.
My former Credit Union solved this by charging instituting a $5 monthly fee for paper statements. Just watch. BoA will figure that one out soon enough as well. As noted previously, this is little more than a naked money grab because they can.
I had “free” checking in the 70’s. Non interest bearing, nominal minimum balance, but no monthly fees. Even included one free box of checks per year. Tagging a couple hundred or thousand clients in those days for a small chunk of change wasn’t worth the paperwork or bad press. Nationalized banks with millions of clients and automated billing systems make that nominal charge almost pure profit. It is a gold mine these banks are going to keep going back too until or unless they start seeing a significant shift in consumer choice from them to local/regional banks or credit unions. If they play it right it is nothing more than grumbling and the shift never happens.
Stores were kind of stuck given the huge marketing campaign behind the cards. I don’t think consumers object to banks making a profit, just against excess charges for something that is to the banks benefit. But now, unlike before, they have the option of going to a lower cost supplier.
If it is feasible. The Times ran an article about how on-line payment systems made it much harder for consumers to switch banks. Not impossible, of course, but much harder than just using a new check book to pay your bills.
The percentage of profit of all businesses for the financial services industry exploded in the last decade with relatively little real benefit to the economy, unlike the computer industry, say. He seems to think this new situation is a law of nature. Banks may have to get by on making a decent profit for providing real services, not by inventing new and risky products. This may hurt the overpriced bling industry in New York, but tough.
No surprise these clowns just don’t get what the OWS people can possibly have to complain about.
Why do you prefer interchange fees (which you as the consumer can’t see and can’t respond to) to debit card fees (which you can)? Why do you think the former is superior as a price signal in a free market?