Bank Of America’s Fee Boost Smacks Of Netflix
filed in Daily Buzz News on Sep.30, 2011
Once upon a time, banks made money the old fashioned way. They took in deposits and lent money in their communities, earning a nice spread between the rates of interest paid to depositors and earned from borrowers. They valued relationships and grew their business one client at a time. Today, however, the bottom-line sometimes trumps common sense, and this week’s Bank of America (BAC) debit fee announcement is eerily similar, and potentially as ill conceived, as the recent fee hike by Netflix (NFLX).
Bank of America announced its intention to close the gap created by Dodd-Frank’s debit card fee restructuring. Customers choosing to pay for goods with their debit cards will pay a $5 monthly convenience fee.
The reason behind the increase is simple. The government has capped fees charged by banks to merchants, reducing them to 21 cents per transaction from roughly 44 cents. In the process, the government