Commentary

Here Come New Bank Fees

Bank of America is announcing new fees for services in the wake of lost revenues stemming from Dodd-Frank. Congress tried to “help” consumers by restricting banks from charging fees on debit card transactions (interchange fees). But banks can’t just ignore hundreds of billions in lost revenues. They will have to make that up with reduced services or increased costs. For BoA, both hits are coming:

Bank of America will charge clients new monthly fees if their accounts do not meet a minimum balance, the bank’s CEO Brian Moynihan said on Tuesday.
“We will increase the account balance minimums or charge monthly fees in lieu thereof, which is the choice of the customer,” Moynihan said at a Barclays Capital conference in New York.

These and other measures will allow the bank to compensate for revenue lost due to new regulations put in place following the 2008 financial crisis that led the US government to salvage many bank with massive bailouts, he said.

“Over the next 12 months, we will reset the entire product line.” Bank of America has recently introduced a new account, called e-account, offering reduced fees for customers using automated services, while reducing the number of branches and staff in a bid to cut down costs, he added.

“That provides the customer with a choice, a monthly fee or to be served through automated means in these statements.”

Read this whole story from Breitbart News here.

Also remember that they also tried to help consumers with the CARD Act… but that too just led to an increase in fees and interest rates, much to Congress’s chagrin.

Anthony Randazzo

Anthony Randazzo is director of economic research for Reason Foundation, a nonprofit think tank advancing free minds and free markets. His research portfolio is regularly evolving, and he maintains a wide interest in economic policy at both a domestic and international level.

Randazzo is also managing director of the Pension Integrity Project, which provides technical assistance to public sector retirement system stakeholders who are seeking to prevent pension plan insolvency. His research focus on the national public sector pension crisis has a dual focus of identifying the systemic factors that cause public officials to underfund pension obligations as well as studying the processes by which meaningful pension reform can be accomplished. Within the Project he leads the analytics team that develops independent, third party actuarial analysis to stakeholders considering changes to public sector retirement systems.

In addition, Randazzo writes about the moral foundations of economic theory, and is currently developing research on the ways that the moral intuitions of economists influence their substantive findings on topics like income inequality, immigration, or labor policy.

Randazzo's work has been featured in The Wall Street Journal, Forbes, Barron's, Bloomberg View, The Washington Times, The Detroit News, Chicago Sun-Times, Orange-County Register, RealClearMarkets, Reason magazine and various other online and print publications.

During his tenure at Reason he has published substantive research on housing finance, financial services regulation, and various other aspects of economic policy at the federal level. And he has written regularly on labor economics, tax policy, privatization, and Turkish-U.S. political and economic issues.

Randazzo has also testified before numerous state and local legislative bodies on pension policy matters, as well as before the House Financial Services Committee on topics related to housing policy and government-sponsored enterprises.

He holds a multidisciplinary M.A. in behavioral political economy from New York University.

Follow Anthony Randazzo on Twitter @anthonyrandazzo