Boycott Bank Of America Which Is About To Institute A $5 Debit Card Usage Fee

Tyler Durden's picture

Just when we thought we had seen every imaginable form of stupidity out of Bank of America, they go ahead and stun us all over again. The latest shock is that starting next year, the repository of hundreds of billions in underreserved (apparently the SEC finally figured out what was obvious to Zero Hedge readers since October 2010) toxic Countrywide mortgages, instead of shoring up capital, will do the opposite and start charging anyone with a debit card $5 a month fee for said card usage. Needless to say, this is obviously a collusive attempt by all the big banks, who are so desperate to generate some revenue (with the 2s10s flatter than at any time in the past 2.5 years) they are willing to drive away millions of paying customers. The problem is that the bulk of depositor clients will simply walk away from Bank of America (which had $1,038 billion in deposits as of June 30), and any other institutions that piggy back on this (and from a game theory perspective, everyone has to do it, or nobody will do it), and instead pull cash out of any and all checking and time deposit account forms. As a result, the key buffer that big banks have had during the entire financial crisis, cash from deposits, is about to disappear. This comes at a time when every US bank is fighting tooth and nail against Basel III implementation which forces banks to have more not less tangible capital (read cash, up to and including deposit cash). Alas, doomed for failure such idiocy can only come out of the US banking system which should have long been insolvent and replaced, but instead the Fed's policy of intercontinental Moral Hazard continues to encourage such "survival of the anti-fittest" decisions with pride. It goes without saying that we urge any and all of our 5 million monthly readers to pull any funds they may have from Bank of America in retaliation for this insanity.

From Dow Jones:

Bank of America Corp. (BAC), the largest U.S. bank by assets, plans to charge customers a $5 monthly fee for making debit card purchases
starting early next year, according to an internal memo sent to bank executives Thursday.


The fee will apply to customers with various checking accounts during any month they use their debit card to make a purchase. The fee will not apply to customers who do not use their debit card to make a purchase or who only use it to make ATM transactions.


Bank of America is trying to cushion revenue losses it expects to incur from new caps on the fees merchants pay when a customer uses a debit card at their stores. In June, the Federal Reserve Board finalized rules capping such fees at 24 cents per transaction, compared with a current average of 44 cents.


Bank of America has said it expects the caps, which take effect Oct. 1, to erase $2 billion in revenue annually. Industrywide, the caps, which apply to banks with $10 billion and more in assets, could wipe out $6.6 billion in annual revenue for banks, according to an August report from Javelin Strategy and Research.


"The economics of offering a debit card have changed with recent regulations," a spokeswoman for Bank of America said in a statement Thursday.


The fee will apply to various consumer checking accounts but will not apply to customers in certain premium accounts, the bank's memo said.


"This new fee allows us to continue to offer the convenience of a debit card with the full range of added features customers have come to expect," including fraud protection and monitoring, special savings programs and other services, the bank's memo said.


Other banks have introduced or are testing new fees in response to the debit fee caps, which stem from a provision known as the Durbin amendment in last year's Dodd-Frank financial regulation overhaul legislation.


Wells Fargo & Co. (WFC), said it will charge a $3 fee for debit and ATM cards in several states starting in October if customers use the
cards to make a purchase under a pilot program.

So, yes: if one is a preferred customer (read rich), they will be spared. 99% of the client base however won't be.

All joking aside, we give this retarded proposal about 2 months before it is buried in congressional hearings that make a mockery out of the executive who came up with it.

However, the take home message is that BAC is now willing to perform amputation in order to desperately raise capital. We are certain what little is left of the bank's shareholders will not fail to notice this...

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Manthong's picture

And if you thought the NFLX blow back was big.. 

Pladizow's picture

I use my credit card for everything, for the purpose of accumulating air miles.

The only time I use my debit card is to take out petty cash from the ATM, perhaps once every 6-8 weeks.

If they are going to charge me $60/yr for something I dont use that much, it does piss me off, but not enough to have to go through the hassle of closing the account and having to set up all new monthly automatic payment, ex., TV, Cell, Power, Car, etc....

BigJim's picture

Yes, I've already posted this. No, I'm not going to apologize - it's too good not to repeat:


Taku's picture

Taxpayer-funded bailout access fee: $5 per month from each bank to each taxpayer per month.

Executioner's picture

No wonder why BAC is the most active stock today, as well was yesterday...

And it is up... Outrageous.

TheFourthStooge-ing's picture

It's not even winter yet and they're already eating their seed corn. Bank of America makes the Donner Party seem well provisioned.


thewhitelion's picture

Always a pleasure to vote up a "Donner Party" reference.  FYI, I'm also a sucker for "Release the Kraken."

uno2well's picture

@Bigjim... That was classic! That lady should be blond; epic fail! That's what happens when the News Director decides to hire someone based on their looks and not their brains.

Haddock's picture

Do you think someone did that to her on purpose?

pirea's picture

Actually she is right. Paper Gold is not backed by anything, being a fractional system.

WonderDawg's picture

Good for you, Pladizow. Keep feeding the beast because it might inconvenience you a little to do otherwise. What a fucking fool.

Why would anyone keep their money with BAC (or any of the other behemoths)? You get what you deserve. Hopefully it won't inconvenience you too much when BAC goes under and the FDIC can't cover. Good luck.

Pladizow's picture

Yes, both I and Chris Whelan, considered by many (including Jim Rickards), to be the #1 bank analyst are both idiots because we have BAC accounts.

Good point tuff guy!

WonderDawg's picture

Nice come back. Excellent justification for supporting the thieves. Probably best if you don't try to use your brain for making decisions, just follow along...

Pladizow's picture

I know you are but what am I?

WonderDawg's picture

Just a guess, but, lazy and simple-minded?

Pladizow's picture

I'm a mirror and you are glue, what ever you say bounces off me and sticks on you!

Only a bigger fool argues with a fool.

Respond now BITCH!

WonderDawg's picture

No need to argue, you've already proven my point.

I Got Worms's picture

Pladizow, I'm glad you have a very recognizable avatar. Will make it easier to ignore your posts.

tyler's picture

I would love to see BOA go under.  They're a bank that survives on sheeple.  For my friend to go to a teller at boa and cash his paycheck, he get's charged nine bucks.  Theres no difference between boa and a check in the cash place.

Shocker's picture

Great more fees, I love fees.

Pegasus Muse's picture

"What's in your wallet?"

Not a Wanker Bankerster of Amerika debit card.  Not any more. 

Moved my junk to a local home-grown credit union. 

Strider52's picture

I keep a $10K balance in my account at BofA, just to avoid fees. Otherwise, it's $25 a month just for a checking / savings account. In fact, it's an interest-bearing account, so the bank actually pays me, about $1-2 a year.

I prolly won't be subject to the $5 fee, as long as I keep a minimum 10K in there. Of course, if BofA goes under, I might be out that much, Eeeek!

Whenever it goes too high above 10K, I buy PM's.

edit: spelling error. See? I care...

Greenlight's picture

And the frog said, " This water is warm but it's ok so far..."

nedwardkelly's picture

My company accounts are there, unfortunately I haven't been able to have them moved elsewhere.

The worst of it is that BAC has all but done away with tellers at plenty of branches. I recently went in to deposit some checks to discover that there weren't even deposit slips available inside the branch. When I asked the solitary teller, she told me I had to use the ATM outside to deposit the checks. The ATM was pretty good at handling the transaction, but it was a bit surprising that the woman sitting there twiddling her thumbs was under instruction to send people outside...

So it's pretty much impossible to NOT have a debit card, so this is basically just a straight up extra $5 account fee.

Mr. Foot The Bill's picture

They anticipate laying off 30,000 people and they see no cost savings or efficiency....going forward? But, it really is all about the money because they see the window of opportunity from the new laws and move forward with fees....because they can. I will be bailing from BAC.

jdelano's picture

Yup. That's it for me. Been with BAC for years because they bought my bank and I'm lazy. But they do this and I'm out on principal. Any recommendations for a better bank in ny/ct?

Comay Mierda's picture

thank you for your enlightening response, BAC employee

Financial_Guardian_Angel's picture

Is it posible Brian T. Moynihan is trolling ZH to get the initial response to his trial (lead) balloon?

What was the quote about a "giant sucking sound" again?


kito's picture

bring back the breasts pladizow

clones2's picture

That could be the dumbest and laziest comment I have ever heard...

rpboxster's picture

I'm with Pladz on this one.  I don't have a BAC bank acct, but use a BAC cc.  Never incurred any fees, interest expenses or anything.  Had it forever.  Crazy high limit. I pile up points and cash 'em in.  In 10 years BAC hasn't gotten a nickel from me, but has paid me 1000's for using the card.  I avoid using a debit card whenever possible.  No protections at all for the acct owner.  Thats why banks love bring back the jugs, plz.

Ruffcut's picture

I cut up my debit cards. The merchant account security in grocery stores is a joke. There is some short documentary where assholes sit out in parking lots with lap tops hacking in on weak systems.

You pay your car payemnt, mortgage credit card etc, and some fuck hacks the amount to pay all those checks or electronic transactions. Big shit bouncy ball, up the anus.

Mastercard and visa, do not give a fuck about merchant security. THose evil fucks care about the jig off every transaction. Your bank has to deal with those security losses. And when it is your NSF's are issued, you deal with the hassle. Use a credit card that gets rewards or an occasional blow job and protect you account holdings.

FlyPaper's picture

Its really easy.  I use BAC as my clearing-house.  I don't have to be there; I choose to be there.  They don't give me a damn cent for my money parked there; and now they want to charge me to take it out.  I can easily go back to a basic cash withdrawl.  Couple hundred takes care of the incidentals; and I use the CCard for most of the rest of it.  Cheap work-around.  Or I can use my Credit Unioin debit card.

I think they are dumb as a brick for doing this.  $5 is meaningful to a lot of people.  But maybe they decided they don't want those kind of customers, and this is one way to dump 'em. ?   Would love to have been a fly on the wall for the meetings where this was decided!   


mkkby's picture

If this is an ad campaign for communtiy banks, it sure is a good one.

I've been saying "opt out" and "starve the beast" all over these threads.  Looks like Bac is really helping us out.

hedgeless_horseman's picture

The problem is that the bulk of depositor clients will simply walk away from Bank of America

Over $5 a month?  I doubt it.  Americans are immune to bank-rape.  Most will not even notice.

Tyler Durden's picture

Really? Netflix lost 60% of its market cap in 2 months over exactly the same amount.

hedgeless_horseman's picture

We shall see.  I will bet you dinner they don't lose more than 2% of depositors over the first quarter of 2012.

Mike2756's picture

you're forgetting societal acrimony, won't take much to trip and send the masses into a blind rage.

Don Smith's picture

you're forgetting societal acrimony, won't take much to trip and send the masses into a blind rage. </sarc>

There, I fixed it for you.

Incubus's picture

Mess with football, or their pisswater they call beer and they might go into a blind rage, otherwise don't count on them for any sort of movement besides the bowel kind.



espirit's picture

If that five dollah latte at Starbux now cost them an extra fiver per month, somethings got to give.  What next?  5 bux per purchase, no cash withdrawls, no shorting?

Penny stock in 3...2...1

Cathartes Aura's picture

while I agree with your footie & booze line, what's with the "they"?  dudes HERE are banking with a TBTF, and they all think they're so damn rad to be here at the "hedge.

daily posts have been talking smack about leaving their banks for as long as I've been reading this space, and here we are, still propping up the banksters 'cause it might interfere with their EZ mode lives. . .

the key buffer that big banks have had during the entire financial crisis, cash from deposits

well done Fight Clubbers.

DoChenRollingBearing's picture

I would agree with you h_h, I think you would win dinner...  

If you do NOT use the debit card for those $2.00 purchases at 7-11, then you are not affected.  I see this all the time at 7-11 and other places where people use their debit cards for tiny purchases.  That has to cost something.

I just use cash myself.  I LOVE cash!  Anonymous and all.

People will pay the $5.00 if they like using their debit cards so much.  BAC has probably studied this, and concluded that they will make more than they lose.  But, as Tyler says, we will see.

SilverIsKing's picture

I would bet that those who use their debit cards for tiny purchases are the ones who can least afford the $5 per month. So as long as there's an alternative, i.e. TD Bank, PNC, etc, that don't follow suit, this will be a net loser for BAC.

What is it they say about those who lose? Oh yeah, they're losers.

DoChenRollingBearing's picture

Green for good observation.  

Here's an observation for you: if they are that poor, then the transaction costs for BAC may be unattractive, so they might not miss those customers much...  If they can least afford the $5.00 / month, then how much money do they have there?

hedgeless_horseman's picture

Weeding the garden.  We do it in our business.

DoChenRollingBearing's picture

Yes, so do we in Peru!  We have slow paying customers or those who return too many bearings, hey then it's cash only, no credit for you, muchacho!


JUST heard on the radio that two other big banks are going to try the same as BAC, but charging $3.00 / month in selected markets, no other details given.

So, big deal.  Who cares.

fuu's picture

Why is it no big deal that banks are starting to charge fees to access your checking account money conveniently? Pay by check and you get no fee, pay with a card and you have a fee now.

It's the account holders money for god sake.

Just sticking the head in is still fucking.