According to CNBC, The Wall Street Journal is reporting today that Bank of America (BofA) is considering new fees. This time, the targets are those with low balance checking accounts who don’t use other bank products. I’m not quite sure how BofA thinks this will ‘sell’ when the monthly fee on debit cards failed so miserably.
There is no question that BofA, and pretty much all banks, have been hurt by new limits on debit card transaction fees and other restrictions imposed by Congress. Most of us understand that. We also understand that banks are in business to make a profit. They are not charities. No problem.
But I can’t think of any way to sell the idea that the solution to a big business problem is to get more money from the segment of customers who can least afford it. That’s what the debit card fee tried to do, and that’s where this one sounds like it’s going. If the reports are accurate, I expect more backlash.
I just can’t imagine this strategy ever working. I wouldn’t even put the idea in writing considering the current economic climate and low public opinion of financial institutions these days. You’d be better off just telling people you don’t want their business.
On the other hand, if this statement from the WSJ story is correct we may have even bigger problems ahead…
“J.P. Morgan said Tuesday that 70% of customers with less than $100,000 in deposits will become unprofitable for the bank because of new regulations, such as caps on overdraft fees.”
We may not like our banks, but they’re necessary. Don’t you agree?
So, is BofA really deaf or can’t they afford to listen? A few things to think about:
- Perhaps BofA is looking at the airlines and thinking, “Why can’t we do that?” Baggage fees certainly weigh heaviest on the people who travel the least. (And why the hell have we let the airlines get away with all their fees?)
- Where did the money saved from those lower debit card transaction fees go? I don’t see any evidence that retailers put it back into consumers’ pockets.
- Is anyone else tired of hearing that these problems are the unintended consequences of legislation to protect us? I’m thinking there might be too many lawmakers protecting us on the path to the poor house.
On a brighter note, thank you for all the encouraging calls and emails last week about me stopping smoking. Amazingly, it is still working! Tomorrow will be two weeks without a cigarette.
Tell me what you think…