BoA Blatantly Steals Money from Customers

Bank of America (BoA), one of the largest national banks in the U.S., announced its new service charge for customers using debit cards for purchases. Starting next year, the $5 monthly fee will apply for purchases only, so at least it doesn’t include customer ATM withdrawals, online bill pay or mobile phone transfers. The new charge outraged customers across the country causing protests and petitions in several major cities. 

The bank responded to the angry customers with “[we are] adjusting our pricing to reflect today’s economics” and then blamed the federal government.

The New York Times calls the bank’s statements “simplistic” and a mere attempt to “obfuscate one of the largest illegal transfers of wealth from consumers to banks in American history.”

Vice President Joe Biden blasted Bank of America for imposing this new fee saying, “At a minimum, they are incredibly tone deaf.”

BoA blames the Dodd-Frank financial reform law. This new federal law limits the amount of “swipe fees” banks can charge retailers when customers make purchases using their cards. The bank claims it needs to charge customers to make up for lost revenue. The new cap is 24 cents for an average debit card transaction of $38, – which is about half of what the industry previously collected – and banks are expected to lose billions because of it.

This isn’t the first time BoA has added a new fee to their list this year. Back in February, the bank implemented a fee to checking account holders for receiving mailed copies of canceled checks along with their bank statements. If mailers are such an expensive issue, then why do I receive mailed credit card applications from all of the major banks on a weekly basis? Every member of my family receives these five-page applications (especially from Chase), but why waste time and money when it literally ends up in the trash?

The initial purpose of debit cards was to replace paper checks; in fact, banks actually save money when a customer pays with a card instead of a check. In the 1980s, Visa estimated savings to be between 55 cents to $1.60 per check, which has notably increased over the years.  I guess I just don’t understand why debit cards are costing them so much that they should charge for them.

Bank of America is one of the few national banks to change a monthly fee for debit card users. In February, Chase piloted a $5 fee for customers in Wisconsin, but it still hasn’t expanded to any other state.  Starting October 14, Wells Fargo starts testing a $3 monthly transaction fee in five different states.

If the Dodd-Frank reform law was significantly hurting individual banks, wouldn’t all of them issue additional fees? BoA jumped the gun on this one. They were already facing financial issues this year, and this new fee is definitely going to cost them even more. Customers are literally taking their money and running to the nearest bank that doesn’t charge customers to spend their own money.

I am thankful to be a USAA customer who doesn’t have to put up a fight or sign a petition to keep my money in my pocket versus the bank’s pocket. Thank you, USAA.