The new $5 fee isn’t to be charged on all personal checking accounts showing even a single debit card purchase that month. Some are exempted based on which checking product/relationship applies. It’s a good idea for each account holder to ask their local banking rep if they’re in the best product. Then convert the account to minimize or eliminate upcoming fees.

Also the most basic small business checking account will continue to get a monthly fee waiver IF the customer uses the debit card for at least one purchase during that cycle. There is no fee for using that card, but a waiver. Go figure.

It’s a crazy quilt of fees versus different checking “products,” which aren’t products at all. They are services and always have been so. A lot of this is counterintuitive to even the most intelligent customers, who could not figure out such a witch’s brew on their own.

The worst aspect is that no bank (I mean, certainly no large bank) offers a checking “product” which automatically converts to the least expensive on the menu simply mindful of the activity and balances applying in the current cycle. That would be too consumer friendly.

I believe BofA, the original, initiated ATM/teller-less banking touting it as labor saving, free, wide spread and 24/7/365. So much for that. Now it’s a profit center. Anything for a buck.

Here in Mass the tellerless feature originally came along with Fleet, when it took over BankBoston (completed 2001). It was called self-service checking.

Fleet later dropped it due to customer complaints and bad publicity. BOA took over Fleet a few years after. No doubt a lot of large banks have tried this idea — most of them think alike with a few variations. . .

Presumably, one bank will notice that the volume of better customer service outweighs the rent-seeking of taking money from customers for simple banking services. In fact, those banks are already here; they’re called your community bank. BankSimple is an online alternative that should ramp up later this year. “The banks” is a colorful shorthand, but there is at least some variance here, at least in simple banking. And hopefully some actual competition in that space will lead to lower prices and fees. That couldn’t happen in a world where swipe fees are collected from retailers behind the scenes and consumers didn’t know how much they were being screwed.

Thanks for pointing this out, David. The community banks and credit unions not only are far less greedy, they’re far more likely to lend you, the Average Person or Small Business, some money.

And it occurs to me that this is something the Occupy Wall Street folks could and should heartily support.

These can easily be avoided by not using banks……. If we choose to use a bank it is probably fair for them to charge us for the services being provided no? If you keep items in a storage unit don’t you may a monthly fee? Same thing. $5 a month for the peace of mind that my money is in an insured location seems worth it. The banks aren’t the bad guys here.

When you pay for a storage unit, does the owner of the facility open your unit, take your stuff, rent it out & pocket the money?

I think not.

That’s what the banks are doing: you deposit your money [checking or savings account]; the bank lends it [or these days, speculates with it] and pockets the money it makes by doing so.

Storage unit owner also doesn’t pay you to keep your stuff there like a bank does. Its not a perfect analogy but I fail to understand why people assume they should be getting this service and convenience for free.

Have you looked lately at what the banks are “paying” you to keep your money there?

Banks are making more $$$$$ off “your” money than they’re paying you. They’re just currently pissed because they can’t make as much in their “traditional” ways [lending] so they’re looking for other sources of income.

And who screwed up that gravy train?

So keep your money in your mattress. Don’t use the service and complain about it as if you don;t have an option. If you don’t like don’t use the banking service. Just quit whining about it.

And banks making more money off of the interest they are earning vs what they are paying you is their business. Anyone using a bank understands that. Well apparently not everybody.

Actually I think we will be moving away from banks as they simply are not a good value for our money. They most certainly are the bad guys: they wrecked the economy, not a soul has gone to jail, they are making more money now than ever. The storage unit analogy does not work at all. Banks use the individual money to make money for itself. The repayment resource if something goes wrong comes from the taxpayers, not the banks. But that’s not really the beef, is it? They wrecked the economy by their gambling games. Why would we ever trust our money with a bunch of irresponsible players?

The point of this article is well taken. Whatever the future, if there is one thing we can be sure of. No institution has a hold on us if we choose to walk away. We will find away to live without their “service” and their “convenience.”

For such a Christian society, we have this ironic tolerance for banks.

I’ve seen some conservative commentators view this as a vindication, saying it was the inevitable outgrowth of the restriction on bank swipe fees, and that as a result customers will have to pay more. This of course neglects the fact that customers were paying for swipe fees all along in the form of higher prices at retail stores

do not agree with that, it happens once in a while but mostly not at all.

stores charge what they can get, they do not add on top of the price the can charge because once they do that they lose customers, they do not charge less then the customers will pay because that’s giving away money

the only time swipe fees are added into a price is when you see it directly, for instance at the pump you might see 4 cents more for credit, or you might see somewhere a “discount for cash”

otherwise, in general, the price a store can sell an item for does not change because costs go up

my place, we have a price marked and that’s the price no matter cash or credit, if a customer lobbys for a discount THAT’S when we might lower the price for cash, otherwise we charge what we can get

That is a completely false argument you make. People do not have the option of opting-out of banks in general. Banks are the center of financial economic functioning in the developed world, they operated (at great profit) the modern software and hardware infrastructure of financial transaction activity, and exploit this position egregiously.

Banks, in terms of their business with average working people, have far too much power, and should have this business regulated to the point where savings, checking, and basic consumer credit are a public utility.

Fine fine, then the swipe fees are a direct hit on business profits and therefore hiring, you’d have to agree?

I agree with the first part not the second, it is a direct hit on profit, it does not affect hiring one iota

hiring is directly due to sales pressure not costs, no matter what a company makes, they will not hire if there is no pressure on their sales force

my company had a far better year this year then last, we will not be hiring because the sales staff handled that pressure perfectly, it would cost profit if we hired

In my neighborhood, the other day, I canceled an ATM transaction (Key Bank) after the ATM threatened a 4 dollar fee on a 20 dollar withdrawal.

And a savings account I hold with Wells Fargo? Two weeks ago I was assessed a ten dollar “activity fee” after making multiple deposits from a checking account over a month’s time.

Did you know that, every day, when balances are computed for your checking and savings accounts, in terms of the net debits to the accounts, versus the deposits, that the debits are computed first, highest to lowest, prior to deposits being tallied in, to provide the greatest potential for “overdraft” conditions to emerge? Because fees are a profit center for banks?

Ten years ago, I read a report from the FDIC that indicated that 1/3 of the growth in profits from commercial banking as a sector the previous year had come from “emphasized fee growth”.

They’re making money on the fees, hand over fist.

Profit has to do with things like cost of operation too.

Plenty of people go through life without using banks or credit cards. You have a choice to use a bank and who you bank with. The idea that “working people” are being taken advantage of by banks is absolutely ridiculous. Too many people out there want something for nothing.

off course it does, we agree on that, but the profit margin does not affect price or sales force, it is a direct hit on the merchent

there is one caveat

if the profit margin is so low the merchent can’t afford to carry the product or they have to go out of business, then that will affect jobs of course

I for one never understood how a credit card company has the nerve charging the merchent anything at all

the merchent should be paid for accepting the plastic

as a merchant I am lending the buyer money, yet I have to pay a fee to the middle man because I am lending money

it is a bizarre arrangement merchants have allowed evolve

why are you over drafting your accounts? That is essentially fraud and theft of services. Such a deadbeat. You belong in jail.

No, no, not at all, I am so wrong! banks are certainly never taking advantage of their position with working people.

O Heavens How Could I Have Erred So Wrongfully?!

Yes, I am a deadbeat and belong in jail for overdrafting my account, which is a crime of fraud and theft. This is a balanced understanding of society, and wealth, and justice, reflected in your viewpoint. I am sorry I misunderstood my position so, and I apologize deeply to all the world’s bankers for having exploited and robbed them so brutally. I’ll never be able to make amends with society, to be sure. I’ll call 911 at once to explain the needs for my immediate arrest.

just another example of not taking responsibility for yourself and needed the government to hold your hand from cradle to grave. What an embarrassment.

don’t know if that was snark but if it wasn’t it’s uninformed

overdraft is an arrangement the lender agrees to, it’s part of the arrangemet

heavy on snark

Absolutely superb comment, sixgill. You are putting forth excellent “visions” of a better, more sane and rational, humane world, especially with this comment and @13 on Peterr’s post … just previous to this one of DDay’s.

Much appreciated.

DW

edit

sorry, I didn’t see you are on snarkishness

That’s why switching from multinational banks to local banks or credit unions is so important. They’re much more willing to actually lend their money instead of handing it out to their CEOs in the form of unearned bonuses.

Think globally, bank locally!

No, we just need for the banks to stop stealing our money and jobs. People were doing okay until that started. My daughter, a single mom with a son in college, lost her retirement and his college fund. Do you think she deserved that?

ZERO percent fractional lending? That’s lending money you don’t have ANY of.

hahaha yeah the banks aren’t the bad guys.

When this news broke thursday I opened an account at a credit union, BECU.
It will take a month to make sure I am zeroed out of B of A credit cards, and all my funds are transferred that are tied up in a cd. By then it will be over.
The hilarity that has ensued in news reports, is consumers are told they can ‘avoid’ the ATM charge by
1, writing a check,
2, cash, or
3, using a credit card.

They didn’t even use the word stupid when listing the ‘alternatives’…

here where I live, boa bought out fleet, then they proceeded to close the once fleet branches

as far as I am concerned, there should be laws, “when you buy a business you must run the business without firing people”

man it PISSED me off

I read that BofA is laying off 30,000 people. I imagine that not all of them are in this country but I would guess that most of them are.

Hope everyone here has already Moved Their Money out of the Too Bigs – what little any of us have left anyway.

I hope BoA doubles the fee, hehe, even triples it.

For g-aw-d sakes won’t somebody think of the banks!?! :)

If we won’t, who will? You want Obama to have to do all the heavy lifting guaranteeing the financial terrorist profits?

The wonders of efficiency. :)

What we need is more efficiency, less competition, bigger Too Bigs.

How TBTF got that way

So much for the glory days of the Springfield Institution for Savings in Springfield MA. In the late 1980′s they had a policy of giving you $5 if you had to wait more than 5 minutes to see a teller. I cannot tell you how many times the teller said, “May I help you?” at the 4:59 mark.

My current banks (Union, USBank, Chase, BofA) in CA became noticeably shitty in 2005. Service was replaced by accounting tricks. I have had to increase the amount I keep in my checking account because the small checks cash quickly and the large deposits credit slooooowly.

It is clear that the free market is NOT working in the banking sector because service is getting worse!

I haven’t had a bank account since I was 11 years old. Yet somehow I’ve managed to survive an additional 50 years using only a credit union and a mutual fund account, neither of which exacts fees. I’ve bought and sold property, invested in the stock market, borrowed money for home equity projects, cars, and personal expenses (my credit union will lend up to $10K to any credit-worthy member simply for the asking, no collateral required). My only interaction with banks has been through home mortgages, and I’ve found I have to watch them like a hawk, which is not easy, given that they trade these mortgages back and forth among themselves every year or two. I’ve never understood why anyone would choose to put their money in a bank and pay for the privilege.

I like credit unions but they live in the banking world and need to be watched. I’ve googled a bit looking for a CU watchdog site without result. Anyone? They do have some agreements with car dealers etc. that sound iffy to me. And I wonder about executive pay and perks. I’ll need to do some checking in on mine.

My Houston Post Office Credit Union pays me 3.5% on my savings/checking/debit card account balance up to $25,000 I have to use the debit card 10 times a month and some other things, but that is awsome interest these days. I believe there are some others around the country.

Why are you still banking there then? The free market would suggest that you would leave if you didn’t like the service, especially for a period of 6 years……And lets no pretend the banks operate in a free market. Its the most regulated industry on the planet.

But not regulated enough obviously, and not required to obey the regulations and laws that are still on the books, also obviously.

Lets also say that a free market is not one where the large companies hire and fire politicians to set the market rules to their liking.

Over regulated. Which is why shit banks were made to survive rather then go out of business.

It’s not a good comparison because you don’t have to use a storage unit. You do have to use a bank, or a bank-like institution. A bank association representative was on television last night, comparing banks to McDonald’s restaurnts! But again, you don’t have to go to McDonald’s or any other restaurant if you don’t want to.

I don’t believe that banks would offer the debit cards if they didn’t make money from them, and that’s where it seems to me they’re lying. I was once charged for an overdraft protection that I hadn’t asked for, and the bank manager justified it by saying that the cards are expensive (for the bank). But if the cards weren’t very profitable for the banks, why wouldn’t they just stop offering them?

But did he agree to the overdraft protection?

I’d like to go back to the days (not that long ago) that garden-variety savings accounts generated 5% interest, with no fees.

Dday, thank you for pointing out the duopoly on payment processing.

Unfortunately, the consolidation in the retail banking industry is a similar example of the fact that you do *not* need a “real monopoly=1 vendor” (one of the silliest arguments in the wingnutosphere these days) to have monopoly *behavior*. The market share of the community banks and credit unions is small enough that it can be ignored by the oligarchs of retail banking, who know that their large ATM networks and brands are a significant barrier to “loss of clientele” due to the better deals you describe (cf. “IBM and the Seven Dwarfs”).

We are suffering from a simple consequence of the end of anti-trust prosecution in America that comes from lack of understanding of a simple truth: When there are fewer than 5 entrants in a market, there really is no need for explicit “collusion” to fix prices: everyone is big enough so that they realize that rocking the boat is *against* their interests, and it is much more lucrative to *follow* the competition rather than counter market against them.

Also, claims like those above by simpletons who argue that “people just want the service for free” are disingenuous: these fees are bringing in $16 BILLION per yer for annual costs (*including* amortization of the assets for you MBA types) of just a few hundred million for building and maintaining those networks. Ask yourself: are you really happy to pay a 5000% markup on services?

Asking for a more reasonable markup isn’t really “demanding it for free”.

Banking has unfortunately become a license to print money at their customer’s expense, and due to the lack of anti-trust, we’re left with incurring the inconvenience of going to a small bank (and hoping it will be better for our kids), and showing up at #OCCUPYWALLSTREET (or at least sending them pizzas).

Faith in ‘free markets’ is just that, a faith for which there has never been any evidence that they even ever did or can exist among human beings. What we have is an argument of what kinds of regulations work to our mutal satisfaction. That question require a careful study of the history of what has actually happened in different kinds of regulatory conditions. In our present circumstance the evidence is overwhelming that the banking deregulation since Reagonomics, the dismanteling of Glassteagle etc allowed the over leveraging and gambling and fraud in banking that caused this calamity.

But I do think there’s an important distinction to be made between commercial banks and the “banks” that are actually investment houses, although I suppose these entities might be owned by the same unbrella company.

As usual, it’s the lower level workers at BoA who will lose their jobs, whilst the Fat Cat 1%ers at the top will continue to ensure that they pull down their gargantuan salaries and mega-bonuses. But hey! It’s ok for BoA to TAX it’s customers because BoA is in the vaunted private sector. So let’s all pretend it’s not a TAX and call it a Fee, since a “Fee” levied on a citizen by a vaunted private company is A-OK, and just fine & the bestest thing ever. Got it? All is well.

I’d like to go back to the days (not that long ago) that garden-variety savings accounts generated 5% interest, with no fees.

If we did that, who would look out for the speculators? :)

Savers subsidize the pirates on Wall Street and other Too Bigs.

The conservative counter argument is amazing. It says Banks have the inherent right to screw their customers. Dodd Frank is a (very weak) reaction to the fact that banks g-a-m-b-l-e with OUR MONEY and want more of OUR MONEY when they lose. Sounds like Banks are Royalty in conservativeland, doesn’t it.

Agree with the sentiment expressed in your comment but it seems off.

It says Banks have the inherent right to screw their customers.

I’d expect to hear the very same thing from New Dems. Look how many bankers are in high places, have had their profits practically if not outright insured with a New faux-Dem in the WH. that’s not entirely fair though because both parties are corporate through and through.

I get it that there is a libertarian wing that is often parroting that banks should be free to do whatever they like, but is it really accurate to pin banker love only on conservatives? There are Tea Party folks who hate the banks and many conservatives who despise them also.

My point is that the us vs. them is the 98% of us against financial terrorists and libertarian views are even marginalized within the faux-conservative party.

Thought it went without saying that the current crop of Dems are bought and paid for. Talking about ideology only.

It’s obvious that BankEast is a troll, probably paid by the very banksters that ripped you off.

Don’t feed it.

And I bet you believe the gubmint should raise taxes as they see fit. After all, the services you use daily aren’t free of cost.

In Credit Union all the savings account holders are the owners who elect board of directors. Pretty much a very democratic setup of functioning, they reduce systemic risk in the financial system and need to promoted by consumers by joining them whenever possible.

Great thing is Credit Unions are Owned by Savings Account holders, run with a democratic setup, are non-profit and the most beautiful thing is we all a huge array of choice locally in the banking industry. Just aligned with Pres. Thomas Jefferson vision to use a metaphor here.

Instead of complaining whatever silly thing BofA or any other bank plans to do next just simply move to Credit Union, thereby you are supporting local economy, reducing systemic risk in the financial industry since these credit unions are so small and we are doing what consumers are supposed to do make market economy function well by making those smart choices and spurring competition.