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Thursday, October 27, 2011

Brian's mad

Ya gotta laugh at this. Mr. 1% can't handle the truth.

Comments (11)

If customers don't like the $5 debit card fees, they should leave and find a bank or credit union that doesn't charge the fees--problem solved. One of the mistakes banks made at the retail level was making free checking commonplace. People just came to expect "free". I'm sure there are plenty of banks that will continue to provide "free", but BofA doesn't want to anymore--so leave.

Why can't the meanies see that he's just doing God's work?

The new debit card fees were the nudge that my wife and I needed to get us to move from Wells Fargo to a local credit union. For us, paying $72/year in debit card fees to earn $0.50 in interest was absurd.

Not only are there plenty of other institutions that offer the exact same services without fees, we actually get interest on the money we have in our checking account at the credit union. So, instead of paying for the privilege of having a checking account and debit card we're actually making a little bit of money by having it.

The thing is, banks don't make money--(or enough money) providing free checking services to most of the retail customers out there. As the BofA guy says, it's still free if you have $20M in deposits, loans, investments, or some other products that add up to $20,000. There are a ton of people who keep an average of $500 in the bank and the bank isn't making any money on these consumers by providing free checking services. For those customers, they want you to leave for the credit union or some other bank. Then those customers will be the credit union's problem.

I don't know about a deity, but stockholders are laughing all the way to the bank.

I believe the figure I saw in regards to the cap on swipe fees for debit cards was an 8 BILLION dollar loss to the banks. Wonder what B of A's share is of the 8 billion.

I understand your point Ron but I question the feasibility of this kind of an approach for the long term. Granted people with $20,000 or more in the bank are more profitable for the bank than those with $500. However, nearly all of those people with $20k in the bank were at that $500 level at some point in their lives. Once you've told someone that you don't want their business because they don't have enough money I don't think it's realistic to think that you'll get their business once they do. So where is BofA going to get its next generation of loyal $20k customers?

On top of them pricing people out of their banks there's the fact that these jokers played a pivotal role in the global economic meltdown. BofA and their ilk have given people a litany of reasons to be displeased and take their money elsewhere, this is just the latest.

The big banks have too much money and don't need our pittances anymore:


But isn't he on the side of the angels?

Pragmatic Portlander. It's not so much that BofA doesn't want to do business with those retail consumers of lesser means, it's just that they're no longer willing to do it without an adequate return. It gets back to what I wrote earlier, that the retail banking customer got used to "free" banking services. BofA and some other banks made the decision they no longer want to service this segment of the market for free. I'm no fan of BofA but its simply a business decision that has a certain logic to it. As far as loyal customers, that's pretty much a thing of the past. Both retail customers and business customers will change banks at the drop of a hat. These days, banks are pretty much transactional and the relationship part of a banking relationship is pretty much over. You'll see Credit Unions with a quick pick-up from all the new customers but it will soon be realized that they won't be able to afford providing all the lower tiered retail customers with all the free stuff either. Free checking and no fee debit cards, etc. will be a thing of the past in the not too distant future unless you keep a larger balance in the bank in the form of deposits, investments, loans, etc.

PragPDXer: most banks earn MORE fee income on the $500 checking accounts than the $20,000 account...More NSF fees, more non-network ATMs, more cashier's checks and stop-payments.

Any local banker can confirm. The downside is the $500 client is less likely to qualify for a mortgage or new car loan.

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