Bank Of America’s Latest Checking Account Is Free If You Never Go Into A Branch

The banks hate the new regulations being put on them by the financial reforms enacted over the last few years. They hate them because they turn off the spigot of easy fee income that the fat cat bankers have come to expect as their due.

According to this article by Dan Caplinger, Bank of America will begin offering a new checking account that is completely free, with no minimum balances or other charges, so long as the customer NEVER visits a branch office. Should the customer visit a branch, for any reason whatsoever, the account would convert to one that charges a monthly fee of $8.95 per month.

Caplinger opines that the reason that banks are making these kinds of changes to their account offerings is because

Banks have been on the defensive for quite a while now, and the new legislation on debit cards and financial reform certainly isn’t going to help. Having changed from investment banks to bank holding companies less than two years ago, Goldman Sachs  and Morgan Stanley will now have to separate out their derivatives trading units. While that may not affect you much, it’s a big deal to the big banks.

New restrictions on debit card fees will also have an impact. Although Citigroup  reported that limits on debit-card-related fees likely wouldn’t have a big impact on profits because it doesn’t have a huge retail banking business, B of A said it could cost $2.3 billion annually.

As another major player in the debit card business, JPMorgan Chase () could also see substantial lost profits. Yet JPMorgan CEO Jamie Dimon summed up the general attitude toward the regulations: "If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger. Over time, it will all be repriced into the business." In other words, once you think you’ve plugged one leak in the framework of fee income for banks, new ones will pop up to take its place.

It is the same old excuse trotted out by the big banks and the big bank  lovers out there that you just can’t regulate them or else they will just find other ways to make money from fees. Please! How about offering a real service, for a change, and charging for that? Wouldn’t that be a good way to make more money?

Here’s an idea and maybe one of the banks will take me up on it: how about charging a monthly fee for a suite of bank services like access to financial advisor whose job it is to help the customer understand where his or her money is going and how to best manage it? Oh, wait a minute, that would be more expensive to implement than just dinging people with overdraft fees. D’oh!

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