Weve got more good news for you, consumers! It seems that your voices are being heard after all. Well, kind of. Bank of America has decided to temporarily nix their plan to add additional fees to the accounts of lower-income customers. But dont get too excited its not like everyones least favorite bank actually has our interests in mind.
The intent of the plan was to make up for revenue that the bank loses every year on lower-income customers (you know, because banks are really hurting for money). There are about 10 million BoA customers whose annual household incomes fall below the $50,000 mark, who maintain lower checking account balances than average and who dont use credit cards and dont take out mortgages or loans. In other words: they have less money than the average customer and they behave in a responsible way that befits their circumstances. (How very terrible of them. These customers annually cost Bank of America a couple hundred dollars per account. They must be penalized.)
So what prompted Bank of America’s sudden change of heart? Has the second largest bank in the U.S. suddenly been overcome by compassion and understanding? No, it actually seems to mostly be an empty gesture.
Banks and their unfair practices have been making headlines for years now, and they simply cannot continue to be on the front page, FBR Capital Markets analyst Paul Miller told the Wall Street Journal. When times are tough as they have been for a while now banks have to be clever about how they make their profits. Public outcry is undesirable, and banks are well aware of the massive unpopularity of things like low-balance fees and overdraft charges.
So Bank of America has decided to take a different route. To convince people to bank with them, theyve decided to hold off on adding more fees. Theyll try to cut costs in other ways by encouraging people to use mobile banking, for instance. BoA is also looking to make more money off of its higher-income customers by encouraging them to buy into offers and take out loans that they probably dont need. And lower-income customers arent exempt from this, either. Instead of being charged high fees simply for being poor, theyll be encouraged to sign up for extra services that will cost them money things like direct deposit, the ability to cash checks written by other banks or immediate access to their money.
That’s a pretty subtle rip-off. But lower-income customers arent even off the hook when it comes to these proposed new fees just yet, because although the plan has been put on hold, it hasnt been totally axed. When the economy improves and if Bank of America can repair its reputation don’t you think the bank will give it another shot?
While Bank of America has decided to hold off indefinitely on burdening their lower-income customers with even more fees than they already pay, this move seems like more of a face-saver than real change. But hey at the very least, they know were onto them. Although Bank of America hasnt done a total about-face, consumer pressure has at least forced them to take a baby step in the right direction, and you can bet well be watching to see what they do next.