Bank of America defends $5 debit card fee

Reports say the bank has started lobbying Congress and federal regulators to keep its planned fee intact.

By Kim Peterson Oct 7, 2011 5:24PM
Bank of America (BAC) knows customers are furious over plans to charge debit card users a $5 monthly fee. So it's taking steps to make sure that fee doesn't get derailed.

The bank has launched a massive lobbying effort to support the fee, Fox Business reports. The bank is contacting members of Congress as well as the new Consumer Protection Bureau to explain the logic behind the fee.

It may take some convincing to keep the Consumer Protection Bureau off of its back. The bank is worried that the consumer bureau might try to force a reversal of the fee, reports Charlie Gasparino. "Because of all the new regulations, we lost lots of revenues and these fees only partially make them up," a bank executive told Fox Business.

What regulations? The banks say a new cap on the fees it charges retailers and other vendors is going to hurt. Starting Oct. 1, the maximum fee merchants will pay is 24 cents per debit transaction. Prior to the change, the current average was 44 cents, based on the $38 average debit purchase.

The new caps mean banks are out billions. Bank of America alone will see its annual revenue drop by $2 billion. The bank says the new $5 monthly fee for debit card users will restore some of that money.

The fee has provoked outrage from many Bank of America customers, and some have switched banks. The bank's website was down for several days this month, which didn't help customer loyalty one bit.

So will all that lobbying rein in the Consumer Protection Bureau? We'll see.

Tags: BAC
88Comments
Oct 7, 2011 6:00PM
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i wonder how much $$$ goes to the CEO and bloated staff? 

 

Maybe its time for BOA executives to take a pay cut and cut their bloated overhead.  After they do that, then, maybe people could accept the fees.  However, to charge fees so the greedy executives can still receive millions in bonuses is not right.
Oct 7, 2011 5:59PM
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Maybe its time for BOA executives to take a pay cut and cut their bloated overhead.  After they do that, then, maybe people could accept the fees.  However, to charge fees so the greedy executives can still receive millions in bonuses is not right.

 

While BOA is reducing their overhead, they can fire the PR firm they plan to spend millions with that will try and convince people BOA is entitled to said fees and the fees are not silly or onerous.

 

Oct 7, 2011 9:33PM
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I feel much better now. Just closed out my100000. money mkt. acct. Closed out my 20000 cking acct.(BofA had the nerve to chg. me 10.00 for drawing out my acct. and giving me a cashiers ck.) and went to a credit union. When I deposited the money, the teller said I was eligible for free investment counseling along with a gift certificate. The bank didn't even thank me for being a customer of theirs for the last 45 yrs. BofA!!! kiss my a$$....
Oct 7, 2011 5:59PM
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that matress is starting to look more useful than for just sleeping on it
Oct 7, 2011 6:50PM
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The use of a Debit Card avoids the manual transaction of processing  written checks & the use of tellers which saves  BOA  labor costs. Paying for the use of my own money is morally wrong when they loan it out and make more money  off of it. 
Oct 7, 2011 6:02PM
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Charge away!  When everyone has pulled there money out it really won't matter! 
Oct 7, 2011 7:10PM
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They put in ATM's to save money by reducing the number of tellers.  Then started to charge to use the ATM's because they weren't making enough money, even though they reduced the number of tellers.  Then they started to charge to talk with a teller.  Then they raised the rates on credit cards because they weren't making enough money.  Now they are going to charge to use ATM cards that they issued because they wanted to save money by having you take money out of an ATM instead of going into the Bank and doing so through a teller, for which they were charging you.  Yet they make money on ALL the money and other FEES deposited by investing.  If local Credit Unions can do all this without raising FEES, why is it impossible for a multi-national company to do so?
Oct 7, 2011 6:25PM
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Yep, went out today and opened up an account at our local credit union. Bye Bye BofA
Oct 7, 2011 6:09PM
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The bank will lose $2 billion??? How can you "lose" what you haven't made??? Our bailout of the bank was quickly forgotten......

 

Oct 7, 2011 10:07PM
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Today I closed my checking & saving account at BOA and went to a credit union that is actually closer to my house. Ive been with BOA for years but screw this... the credit union I joined doesnt charge anything to use their debit card. As a matter of fact, they never asked for bailout money either, to boot.

Like another poster said, if you want to make an effect, close your accounts with BOA and go to a credit union. Complaining about it is going to do nothing. Actions will. Screw BOA.
Oct 7, 2011 6:16PM
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Notice that they said "its annual revenue drop by $2 billion", not that they will lose money on every transaction.  The law is meant to protect consumers from excessive fees.  Wonder what the profit margin is on those new fees?
Oct 7, 2011 7:39PM
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B O A set up my business account that mandates that I make at least 1 debit transaction each month or i will be charged a fee.  So I make my transaction per the requirements.  Now B O A tell me that they are going to charge me 5.00 for making that same mandated transaction.  HUM, sounds like I am getting shafted either way.  Bye Bye B O A.  Say hello to my little friend, "CREDIT UNION"!

Oct 7, 2011 8:08PM
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DEAR C E O OF B OF A.

 DO YOU GUY'S REALLY THINK THAT THE REST OF US PEONS THINK THE ONLY WAY YOU GUYS MAKE MONEY IS BY RAISING FEES?

YOU BORROW FROM THE DISCOUNT WNDOW @ 1/2 % AND LEND IT OUT AT 4% ON MORTGAGES!!!

tHATS 350 BASIS POINTS PROFIT!

YOU LOAN WALL STREET MONEY OVERNIGHT @ 1 1/2% THATS STILL 100BASIS POINTS POSITIVE CARRY!

YOU GOBLE UP COUNTRY WIDE MORT CORP THINKING YOU WERE MAKING A KILLING, NOT THINKING THEY WERE PART AND PARCEL OF THIS WHOLE FINANCIAL MESS WERE IN.

YOU BOUGHT OUT MERRILL LYNCH AND GOT US THE TAX PAYER TO HELP YOU DO IT!

 

 

STOP CRYING IN YOUR BEER,  STOP LEAVING US THE PUBLIC LITTLE NOTES LIKE   " WE HAVE TO RASE FEES,  F. U.  I CAN"T GET A LONG ON MY MILLION DOLLAR SALERY, F. U.

MY HOUSE IN LARCHMOUNT NEEDS ANOTHER ADDITION, F. U.

 

It took me 3weeks to figure out F. U. doesn't mean  Felix Unger

Oct 7, 2011 6:22PM
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I stopped dealing with the big banks years ago, and split our money over a few different credit unions. it's nice to be able to walk in and have people address you by name, someplace where your more than a number. seems to me when enough people get tired of all BOAs garbage and pull their accounts that they can charge $5 as many times as they want, but a 5 dollar fee don't get them anything if they don't have any accounts. We should have let the big banks fail instead of bailing them out. They are just like children, and they won't learn anything if mommy and daddy come to their rescue every time. 
Oct 7, 2011 8:41PM
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Want a solution.  When they start charging fees to use the debit card, cancel it.   We all got along fine before there was Debit cards, we can do it now.

If you need cash go inside the bank and get it, and then the bank will have to hire more employees to handle the rise of customers at the window.  They loose.

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B of A charging a fee FOR  YOU the customer to use YOUR own money, yeah that makes lots of sense. Pull your money out and put it into a Credit Union. No one should charge a fee for a person to use their own money, and that is exactly what they are doing. Hipporcrits and Unamerican!!
Oct 7, 2011 8:46PM
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You know something I've been a BOA client for 8 YRs or longer. And now they want to charge for  using debit. That's all I ever use. DID THEY GIVE A LOT OF BANKS MONEY TO BAIL THEM OUT OF DEBT? I THINK THEY DID!  And now they wanna stick it too us cause the money is all gone that's not right. It's not are fault that they gave raises to the CEO and other's and that BOA don't know how to manage there money! I work two jobs and make 1,200 a month. And that's two jobs even. The BIG WIGS NEED TO BE IN MY SHOES AND OTHERS too see what the real world like. 

 

BOA IS GOING TO LOSE LOT OF CUSTOMERS BUT THEY DON'T CARE ALL THEY CARE IS ABOUT MONEY.

 

MONEY IS THE ROOT OF ALL EVIL !  PRETTY SAD 

Oct 7, 2011 6:45PM
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I stopped using the "big" banks years ago and haven't been happier.  My local credit union takes GREAT care of me, has no stupid fees, and best of all, they don't report to Wall Street!  Banks are businesses, and businesses are entitled to a profit - but with banks, you can choose your bank!  Just leave 'em, people!  They show you no mercy when they were making BILLIONS off your home loans, why should you worry about them now? 
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