Bank of America to test new fees
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Bank of America to test new fees
Adriene Hill: Bank of America is looking to charge new fees for checking accounts. According to the Wall Street Journal, the bank is currently testing different fee models — including monthly charges of anywhere from $6 to $25.
That’s after B of A had to back off a plan last year to charge people to use their debit cards. There is no word on when customers might start getting dinged with the extra charge.
For more, we go to Brett King. He’s the author of “Bank 2.0,” a book about the future of banking. Good morning Brett.
Brett King: Good morning.
Hill: So tell me a little bit more about the fees Bank of America is considering.
King: So they’re looking at basic checking account fees to be introduced. What they’ll probably do is say if you get certain benefits, if you use channels like the online and mobile channels rather than just being over-the-counter customer within a branch. I think this is a reflection of the changing distribution costs in the business as well.
Hill: Now do you expect other banks are going to follow with their own new fees?
King: It’s likely that there are others just waiting to see how this is responded to in the market, and if B of A gets away with it, then others undoubtedly will be happy to follow.
Hill: Now what’s the likelihood that B of A will get away with it? They did get a lot of blowback about those ATM fees last year.
King: So the thing that’s different with this is they’re basically saying if you behave in this way, then you won’t get fees, but if you don’t, then you will. There are precedents for this: other markets such as the U.K., Australia and so forth did this with basic checking accounts many, many years ago. And there was pushback, but eventually the fees held. But we live in a different world today; this sort of social transparency aspect could make this a very tough move for B of A.
Hill: Brett King is the author of “Bank 2.0.” Thanks.
King: You’re welcome.
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