Bank of America considering monthly fee for basic accounts
Updated: Thursday, 01 Mar 2012, 2:52 PM EST
Published : Thursday, 01 Mar 2012, 10:21 AM EST
Published : Thursday, 01 Mar 2012, 10:21 AM EST
CHARLOTTE, N.C. (NEWSCORE) - Bank of America Corp. is working on sweeping changes that would require many users of basic checking accounts to pay a monthly fee unless they agree to bank online, buy more products or maintain certain balances.
The plan by the nation's second-largest bank by assets is the latest sign of stresses in the banking industry at a time of low interest rates, slow economic growth and new rules limiting many types of service charges. Many other big banks, including JP Morgan Chase & Co. -- the nation's largest -- and Wells Fargo & Co., have rolled out plans that aim to raise fee revenue or push customers to do more business with the bank.
Those efforts are tricky, because they risk upsetting the banks' best customers or drawing fire from politicians. Bank of America retreated last fall from a new $5 debit-card charge following a customer revolt and a wave of criticism.
The search for new sources of income is especially pressing at Bank of America, where 2011 revenue dropped by $26.2 billion, or 22 percent, from its 2009 level.
Bank of America pilot programs in Arizona, Georgia and Massachusetts now are experimenting with charging $6 to $9 a month for an "Essentials" account. Other account options being tested in those states carry monthly charges of $9, $12, $15 and $25 but give customers opportunities to avoid the payments by maintaining minimum balances, using a credit card or taking a mortgage with Bank of America, according to a memo distributed to employees.
In addition, some Bank of America branch employees in the Northeast have already been trained to handle the first phase of a US rollout, one branch manager said.
Bank officials have made no final decision about specific charges or the timing of a national rollout, though the effort has gained even more urgency in the past few months. People close to the bank said Chief Executive Brian Moynihan is determined to plow ahead. Bank of America declined to comment.
It is unclear whether the bank, which counts more than 55 million US households as customers, will stick with its initial idea for a basic flat-fee checking account that doesn't offer a way to avoid paying a charge. That scenario is considered less likely than telling checking-account customers they will face a new fee unless they go online or take other steps outlined by the bank.
Service charges US banks collect on savings and checking accounts totaled $8.67 billion in the fourth quarter of 2011, down 16 percent from two years earlier, before limits took effect on the fees financial firms can charge merchants for accepting credit and debit cards, according to Federal Deposit Insurance Corp. data.
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