Boycott Bank Of America Which Is About To Institute A $5 Debit Card Usage Fee
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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And if you thought the NFLX blow back was big..
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....
Yes, I've already posted this. No, I'm not going to apologize - it's too good not to repeat:
http://www.youtube.com/watch?v=aWyrjwXoIqA
Enjoy!
Taxpayer-funded bailout access fee: $5 per month from each bank to each taxpayer per month.
No wonder why BAC is the most active stock today, as well was yesterday...
And it is up... Outrageous.
It's not even winter yet and they're already eating their seed corn. Bank of America makes the Donner Party seem well provisioned.
Always a pleasure to vote up a "Donner Party" reference. FYI, I'm also a sucker for "Release the Kraken."
@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.
Do you think someone did that to her on purpose?
Actually she is right. Paper Gold is not backed by anything, being a fractional system.
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.
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!
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...
I know you are but what am I?
Just a guess, but, lazy and simple-minded?
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!
No need to argue, you've already proven my point.
Pladizow, I'm glad you have a very recognizable avatar. Will make it easier to ignore your posts.
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.
Great more fees, I love fees.
"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.
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...
And the frog said, " This water is warm but it's ok so far..."
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.
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.
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?
Local credit union.
Local credit union.
thank you for your enlightening response, BAC employee
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?
bring back the breasts pladizow
That could be the dumbest and laziest comment I have ever heard...
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 em.....ps. bring back the jugs, plz.
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.
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!
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.
Over $5 a month? I doubt it. Americans are immune to bank-rape. Most will not even notice.
Really? Netflix lost 60% of its market cap in 2 months over exactly the same amount.
We shall see. I will bet you dinner they don't lose more than 2% of depositors over the first quarter of 2012.
you're forgetting societal acrimony, won't take much to trip and send the masses into a blind rage.
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.
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.
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
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. . .
well done Fight Clubbers.
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.
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.
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?
Weeding the garden. We do it in our business.
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.
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.
I will usually green a monkey with a gun pointed near my way. So green it is!
Well, yes, but you do not have to use a bank. If they want to charge you for something, then accept that or move on. They offer a service, if you do not think it is worth it, well... Using banks is a CONVENIENCE, it is not mandatory. Yes, it is inconvenient to pay bills without using a bank, well too bad.
You want cable TV and cell phone service? Then pay up. You want bearings, then pay up.
I use cash as much as possible. I use my CREDIT card for airline miles (like another poster above). I ONLY use my debit card to take $$$ out of the ATM. So that $5.00 charge would not apply to me.
Your person who uses the card for $2 purchases is most likely a wage slave and it is nearly impossible to be a wage slave at this point without a bank account. Very few employers pay by paper check. No one accepts 3rd party checks anymore. Check cashing services will cost more than the $5/mo fee for using the card as do most banks on which a payroll check is drawn.
If employers paid in cash that would be one thing, but as it is cash only comes from ATM's.
An employee can always cash his or her paycheck (or any check) at the employer's (maker's) bank for free.
Not always. Fees can be assessed if the presenter does not have an account at the bank.
http://www.helpwithmybank.gov/get-answers/bank-accounts/checks-cashing/faq-banking-check-cashing-03.html
Thats right and BoA charges $5 for cashing checks if you don't have an account even if the check is from an acc. at their bank.
Why the fuck would anyone still have a bank account with, do business with or have anything to do with the top five Bailout banks? Why not bank or credit union locally and buy a Ford.
Congrats on being the 1%...
I think its the other 99% of customers that may have an issue with this...
Yes Bank of America provides a service...
and YES - there are other banks that provide the SAME service, BETTER, and now CHEAPER!
Great business decision.
Ahh, I WISH I were in the 1%! If gold reaches FOFOA like numbers, I WILL be there!
Everyone of us is free to choose which bank they want to use, hey I have no problem with that. If BAC is making a bad decision, then they will suffer for it. OK.
---
Now, about that 1% business..., how do I get there?
Good luck becoming rich by hoarding gold?
DoChen,
Dump the Debit card,use an ATM card.
Most places accept ATM cards(they say they dont,but slide it thru, and punch Debit),it will ask for a PIN, give it. As long as you punch in your pin(unseen by them).So you still have paid cash, and protected yourself from hackers, and scammers.
I beg to differ. I don't like carrying a lot of cash around, I use my debit card for everything. Debit card = money that I have, that I can access easily. Those who use credit cards for tiny purchases are already hurting. I'm not paying $5 a month for that privilege, that's utter bullshit.
Me too. I hate taking change. It reminds me how inflation has raped us over the years. I'll gladly use a debit card for $1.50 to avoid the change.
For the lion's share of my purchases, I use a credit card... and this includes de minimis purchaes (less than $5)... I get 1-3% back for each purchase... I don't care who down stream has to pay for the processing... I'm incentivized to use it, so if you want it to change, then disincentivize me.
It's either this, or cash... no debit cards.
I suspect that anyone on the margin is going to go the cc route (too many benefits to mention over debit) if the transactional fees on the debit increase... the competition's cost is ZERO.. it's just like refinancing a house... who the hell is going to refinance a house when they aren't paying the mortgage as it is??? How do you compete with free (cash or credit) or where you get paid to use the card? Good luck with that.
[note, if you're going to use a cc, you MUST pay the balance off in full each month in order for it not to "cost" you].
Carry cash! People with tens of thousands in the bank, and carry 20 bucks?
Driving around and you are forced off a lonely road, perhaps. Farmer JOnes drives buy with his tractor. He pulls you out. Verses walking I'll give the farmer 50 bucks to keep me from walking 3 miles or wait 2 hours for my tow service.
If you're a man with any money and don't carry a small wad, I call you a pussy. "I don't like cash, it makes me uncomfortable, it's dirty." Sounds like pussy talk, I don't care who you are.
Exactly, Ruff ....living in earthquake country, I always keep a cash wad accessible within easy reach of a 9 mm. Also pay cash at my favorite restaurant where the owner is my friend. He saves the fees he would have to pay to the bank on my behalf. I resist using a cc for the same reason. Don't want the banks profiting period. They need to be shut down and reorganized.
On a more personal note, just got my check from the SEC vs. BofA Fair Fund distribution in the amount of $ 39.72 for a Merrill fiasco involving my ownership of 1300 shares in '09.....(I lost considerably more than 40 bucks in that fraud). The Lawyers obviously got rich. I only get more pissed.
I love carrying a good bit of cash. I feel naked without at least a grand in my pocket. And it comes in handy sometimes. You might be surprised.
I think a lot of people don't realize they can get the same services from a credit union without the fees. I use credit unions exclusively and have not paid a fee in years. I used to have to pay a $10 wire fee when I sent money to brokerages, until I started using electronic funds transfers, then no fee. On line banking etc.
How 'bout we set up a prediction market on how many depositors will flee BAC in 1QFY12? I wonder what the even odds would be for that? My guess would be >5% <15% so ~ 10%. I don't think they can afford that. Maybe they will break even with the fees revenue they generate. I'm not sure why anyone would want to use a debit card. It is much more onerous/inconvenient for the user when a fraud happens (as it often does) and someone drains your bank account. With a credit card, it is much less convenient when fraud happens.
+/- 10% seems to be a reasonable guess. And who would those be? Those with little money in the bank who might COST BAC more than they get from them.
Free enterprise...
Good observation re fraud. Green.
Depends on the state of the banks in general... In a bank run, even if the local/regional seems incredibly well capitalized and solid as wood, there will be a run on it... thinking of 2008...
All those deposits won't go under mattresses... they'll get deposited somewhere... and, sadly, they'll go up stream to the most systemically risky institutions under the premise that the government will backstop them no matter what. This is why these institutions have sought to increase their systemic risks, among other reasons...
Unless of course all those deposits get immediately converted into tangible goods or realty... in which case it would be time to panic. [*dave attel voice* if you see a naked man running down the street, YOU RUN WITH THAT MAN! Something really fucking scary is behind him]
I hope that you are right, but I'm not sure that BoA's move will be as transparent to their customers as the Netflix deal was (announced via email). If BoA simply adds more fine print to one of their countless disclosure statement mailings (that nobody reads), I would guess that a lot of people won't notice this until it is in effect--if they ever notice it. Add to that the natural inertia that most people feel about changing banks, and the fact that other banks (like Wells) are likely to follow suit, and I'm not so sure that these scoundrels won't get away with this....
I'm pretty sure that every tinny voice of the airwaves, alarmed at the implications this has on already cash-strapped and employment-challenged Americans of the flag-waving, Chevy-driving, apple pie hole stuffin', Lion/Packer/Bear watchin', kazoo-blowing, look-ma-I'm-on-America's-Funniest-Home-Videos watching patriot of an informed citizen, will quickly and en masse tell us that this new policy is one which we should be quite leery of--indeed, they'll tell us, from a pedestal of high regard for the common person, that we should shoot emails off to our representatives post haste, and let the process of truth and justice prevail. Thank God for America! Land of the Free! Home of the Brave!
Lots of people here seem to be anti NFL?
I'm one!
Yeah, but switching banks is a pain in the ass. They'll lose clients, but not nearly as many as they should. The most common thing I hear from people w/ BofA accounts when I go apeshit on them for still banking there is, "well, there are so many ATMs. It's convenient." I just facepalm and walk away.
People. Just. Don't. Get it.
So switch to one of the banks that reimburse you for any ATM fees. I get a bit of a kick out of withdrawing money from ATM's with ridiculous ATM fees (eg gas station) knowing my bank has to cough up for it.
Tyler, you can count the ZH cadre who use BoA on one hand. The decline must come from Joe6p, five bucks a sixer = a flight to liquidity.
As a long time ZH'er I "bailed" from BAC back in 2009.
Lots of execs there who should be jumping.
Jump! You Fuckers!
I left Wells Fargo after 15 years in January. Fuckers charged me some random 34$ fee for closing out all my accounts. I paid it with a smile.
More like Jose Cerveza. BoA has marketed itself agressively to illegals.
It's not like there are a lot of other banks courting this business, so Jose will probably shut up and pay.
Now if BoA slapped an extra $5 fee on remittances, there might be an outcry.
"Bank of Amigos" moniker has sunk into the mud, some of us do remember. - Ned
Yeah, but I had thought because of the Patriot Act (at least what my bank told me), any new account requires a valid SSN or proof of legal residency (not just a driver's license which can be faked in any case). How does that work for illegals?
From my days of growing up in AZ, I remember quite a lot of check-cashing stores and western union type of operations which were frequented by the local 'clientele'. It seemed to me that most were in a cash-only economy, frequently paid under the table in cash.
How does that work for illegals?
BoA simply ignores the rules. Not like most illegals don't have a fake Social Security card anyway and BoA clearly isn't checking for validity.
I live in the Northeast and going into a BoA branch is like traveling to the third world. Rare to hear any English spoken.
This is still the case in AZ, but much harder to do with new laws, e-verify and the like. Before there was deniability on the part of the employer ("He said he was legal") and now it requires much more overt lawbreaking. There are usually high profile busts about once a month of well-known businesses that hire illegals; I know a recent one they found multiple employees all using the same fake SSN, which was presumably employer-provided.
It's still cash-only, but the scale is down a lot. I used to see lines waiting by the western union desk in the local grocery store on paydays, and I haven't seen anyone even waiting for more than two years now.
The banks got into the check-cashing business and started charging fees as well, which I though was insane (seriously, BofA charging someone $5 that comes into the bank to cash a $100 check drawn on a BofA account.) This has knocked down the number of check-cashing places, as had a lot of zoning law changes.
I count two handfuls so far this thread, I'm sure there's more - I'd say a good majority of ZH posters appear to be banking at TBTF, after all this. . .
jump you fuckers.
Nobody! and I repeat NOBODY should be using debit cards from major banks. All it takes is for one shaddy customer support person (waiter, point of sale person, etc.) to swipe your card and your account is empty. Stick with credit card and pay if off to zero every month to avoid interest and fees...but if I wasn't clear DO NOT USE A DEBIT CARD. There, problem rendered moot.
Agree, just from the fraud perspective, debit cards are the worst to use. My bank sent me one to use, I cut it up. I don't need the 'convenience' of having my account cleared out.
@ Deadpool
Great point!
I ONLY use my debit card to take $$$ out of the ATM. I use my credit card when I do not want to use cash (or I will pay by check). And I pay with cash.
Soon the banks will be charging you to use CASH!...(Oh, that's right we already pay for using Federal Reserve Notes!)
Mo' Fees, Mo' Fees, Mo' Fees -
Visa Inc. and MasterCard Inc. are reportedly planning to dramatically raise the fee charged to merchants for small ticket items, according to Janney Capital Markets analyst Thomas McCrohan.
Today, a merchant pays about 8 cents to the card networks to process the purchase of a $2 cup of coffee, but McCrohan said the two companies are planning to spike that to 23 cents.
http://www.google.com/hostednews/ap/article/ALeqM5g8dUMYKmVtufwwDF86R2WW9sZ5aQ?docId=287d7f1a1bfb40ecaf4262107f707082