Banks reward you for helping to bail them out.

[TimG]

Examining the available options, it is clearly obvious that $60/year for a debit card is utterly not competitive.

Did you ever consider than the BoA might WANT people to use credit because they make more money that way?

[GostHacked]

Bank of America repaid all the bailout money it received in late 2009 -- the federal government made more than $4 billion off the arrangement.

Read more: http://www.foxnews.com/politics/2011/09/30/durbin-slams-bailed-out-bank-america-over-new-debit-fee/#ixzz1ZSIw1sUG

Bank get bailed out with taxpayer money.

Bank pays it back, and the gov makes 4 billion.

Banks thank the taxpayer by raising fees.

Will the gov thank the taxpayer as well and give that money back?

[Guest American Woman]

Bank get bailed out with taxpayer money.

Bank pays it back, and the gov makes 4 billion.

Banks thank the taxpayer by raising fees.

Will the gov thank the taxpayer as well and give that money back?

We were given "making work pay" tax credits the past two years, so yes, we were given money back.

[Bonam]

Did you ever consider than the BoA might WANT people to use credit because they make more money that way?

That's fine. The credit card issuer market is much more competitive and diverse than the bank market, however, and it is easy to have a credit card not associated with your deposit bank. BoA is not competitive as a credit card issuer, I would guess the vast majority of their credit card customers are only there by inertia, because they have a bank account with them. If people switch from BoA so as not to risk being hit with this fee, they are likely to lose credit card business too.

Look, they have every right to raise fees like this if they want, but you seem to believe that because a big bank did it, it must automatically be a good business decision. The reality is BoA has been floundering, they have not been making good decisions. This one, in my estimation, will cost them a lot of business.

[Shady]

Who does it benefit when the banks raise your fees? You scratched their back, now they are raping your ass.

Businesses raise prices for a number of reasons. A $5 dollar monthly charge for unlimited use of debit is hardly a rape. But if you don't like it, move to a different bank. By the way, BOA as paid back all of it's TARP money, with interest.

Well, since taxpayer money was used to bail them out, then yes they do report to the common man because it's their money used for the bailouts. And now that they paid the money back, they will raise bank fees to make up for that loss.

And the common man can choose not to bank with them if they don't approve.

They had crappy business practices and should have been allowed to fail, instead, taxpayer money was used to bail them out, and money paid back to the lenders with interest, but do the taxpayers get a break because they helped bail out the bank? The answer is no. More fees, less services.

Actually, they paid back the government with interest. And their crappy business practices were partly the fault of the government. If you're saying that government should stay out of the business of the private sector, I agree.

[Shady]

And btw, are GM and Chrysler allowed to raise the prices of their cars? Because they have.

[TimG]

Look, they have every right to raise fees like this if they want, but you seem to believe that because a big bank did it, it must automatically be a good business decision.

I never said it was a good business decision. I am only arguing it is a legimate business decision that was brought on by cap on merchant fees. That said, I think consumers should bear the brunt of the cost of the banking services they use. If someone wants to complain about banks the should be complaining about how people are tricked into using credit cards which add 3%-5% to the price of goods because the cost is born by the merchant rather than user of the credit card. Edited September 30, 2011 by TimG

[ToadBrother]

I never said it was a good business decision. I am only arguing it is a legimate business decision that was brought on by cap on merchant fees. That said, I think consumers should bear the brunt of the cost of the banking services they use. If someone wants to complain about banks the should be complaining about how people are tricked into using credit cards which add 3%-5% to the price of goods because the cost is born by the merchant rather than user of the credit card.

The one benefit to this is that it is significantly more transparent to the consumer than what amount to buried fees to merchants. Businesses for years now have tried to make the case that the fees they're being charged are outrageous, but it's never really caught on. Now the average consumer will directly taste it.

[maple_leafs182]

I'm a student so it is free to use my debit card as much as I want.

[bush_cheney2004]

.... If someone wants to complain about banks the should be complaining about how people are tricked into using credit cards which add 3%-5% to the price of goods because the cost is born by the merchant rather than user of the credit card.

Agreed....the convenience of such services are worth it to me. I don't want to be the boob in line still writing checks or fumbling with cash. The PayPal fee is also 3% for sellers, and worth every penny.

As for the banks and "taxpayers", not all taxpayers are BAC customers.

[TimG]

Agreed....the convenience of such services are worth it to me. I don't want to be the boob in line still writing checks or fumbling with cash. The PayPal fee is also 3% for sellers, and worth every penny.

You are correct that many vendors will not offer non-credit card discounts. The issue is a question of choice. Vendors should be allowed to pass the cost of credit cards onto those that use them if it makes sense for their business.

[Oleg Bach]

60 bucks amounts to 6 packs of cigarettes - big deal................I like it when they say > "we think you are a crook and will have to hold your check for one week to clear" - Meanwhile they do this to 50 thousand people across the nation - generate profits from this holding - but give you nothing for using your money for that week...real nice guys playing the reverse - insinuating that the public are crooks....I have seen them put a hold on a cheaque issued by their own bank - what the hell is that?

[Bonam]

I never said it was a good business decision. I am only arguing it is a legimate business decision that was brought on by cap on merchant fees. That said, I think consumers should bear the brunt of the cost of the banking services they use. If someone wants to complain about banks the should be complaining about how people are tricked into using credit cards which add 3%-5% to the price of goods because the cost is born by the merchant rather than user of the credit card.

I agree... transparent costs are good, and customers paying for the cost of services they use makes sense. However, I don't buy for a moment that it takes $60/year/person to provide the debit card service. In fact, I am certain that the newly capped fees still more than cover the cost of the service, and that they cover it many-fold.

The issue is not one of covering costs of a particular service, but of making profit and covering the costs of other services that lose money. You can raise the cost of a service that is a winner and hope to make more profit, but you risk driving away customers to your competitors if they offer that same service for less.

BofA will drive away all moderately intelligent customers who periodically use debit cards with this change, period. They'll keep people that never use debit cards and don't care, and they'll keep idiots that can't tell the difference between a fee and a box of bricks. But if someone uses a debit card and has the option of either paying $60/year or not for that usage, why the heck would they choose to pay the $60?

Anyway, I opened up an account with an online bank today, will get everything migrated over the next month or two. They charge no fees of any sort for common services, pay 1% interest on my checking account balance, and reimburse ATM fees of any ATM belonging to any bank in America, which is a lot more than I can say for BofA.

[Shady]

I don't buy for a moment that it takes $60/year/person to provide the debit card service.

Really? Even unlimited usage? How do you know?

The issue is not one of covering costs of a particular service, but of making profit and covering the costs of other services that lose money.

That's the case in any business. Always has been.

You can raise the cost of a service that is a winner and hope to make more profit, but you risk driving away customers to your competitors if they offer that same service for less.

Exactly right.

[Shady]

Looks like GostHacked should have done a little more research before posting his hit piece on Bank of America. This new fee is a result of Obama's financial reform legislation signed into law last summer. This new reform mandates that the fee banks charge institutions for using their credit cards be cut in half. As a result, banks are looking to make up for this regulation in other areas. Hence, the new debit transaction fee.

It's just the latest and ever-growing example of the unintended consequences of so-called good intentions, when government inserts itself in the private sector. You'd think they'd have learned their lesson after the mortgage fiasco. But nope. They never seem to get it.

The Dodd-Frank Act's Durbin amendment, due to go into effect on Oct. 1, caps fees banks can charge merchants for processing debit card transactions at 21 cents per transaction from an average of 44 cents, potentially costing banks billions of dollars.

Banks also face broader operational challenges as low interest rates and higher capital requirements hit profitability, and the sluggish economy depresses loan demand.

Link

[GostHacked]

Looks like GostHacked should have done a little more research before posting his hit piece on Bank of America. This new fee is a result of Obama's financial reform legislation signed into law last summer. This new reform mandates that the fee banks charge institutions for using their credit cards be cut in half. As a result, banks are looking to make up for this regulation in other areas. Hence, the new debit transaction fee.

It's just the latest and ever-growing example of the unintended consequences of so-called good intentions, when government inserts itself in the private sector. You'd think they'd have learned their lesson after the mortgage fiasco. But nope. They never seem to get it.

Well it only took you until page 3 to throw it on Obama. In the end what you say has some validity. Just like the deregulations that took place under the Bush Cheney day which helped the housing bubble in the USA and many of the other financial ills we have seen as of late.

And in the end the savings are passed on to the users of that bank.

[Shady]

Well it only took you until page 3 to throw it on Obama. In the end what you say has some validity. Just like the deregulations that took place under the Bush Cheney day which helped the housing bubble in the USA and many of the other financial ills we have seen as of late.

Which Bush Cheney deregulations are you referring to?

[bush_cheney2004]

Which Bush Cheney deregulations are you referring to?

The ones signed into law by Bill Clinton!

[Shady]

The ones signed into law by Bill Clinton!

Shhhhhhh! He's a drone. He doesn't actually know the facts. He just likes repeating what he hears. You'll ruin it!

[Shady]

Well it only took you until page 3 to throw it on Obama.

Ok, so who should get the blame when it comes to the consequences of Obama's reform? Richard Nixon?

[Shady]

Come'on GH. Were still waiting on the Bush deregulation you were referring to.

[GostHacked]

Which Bush Cheney deregulations are you referring to?

http://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_Act

I think the repeal process started in the early 80s but the act was repealed in from what I can tell is late 1980s. But it's funny how Bush and Cheney did some pretty crazy things to the economy and you just shuffle that onto Obama.

So I was wrong in saying it was a Bush Cheney thing.

Sorry .. from the article .. repealed in 1999

Edited October 4, 2011 by GostHacked

[GostHacked]

Come'on GH. Were still waiting on the Bush deregulation you were referring to.

We wait for a lot of things from you as well. So don't get all too high on your horse.

[Shady]

We wait for a lot of things from you as well. So don't get all too high on your horse.

I'm not on any high horse. It's just that the Bush deregulation lie has been a talking point perpetuated constantly. And it's time it was finally stomped out.

[GostHacked]

I'm not on any high horse. It's just that the Bush deregulation lie has been a talking point perpetuated constantly. And it's time it was finally stomped out.

You going to retract any of your perpetuated lies anytime soon? Nahhh, did not think so. So yeah, high horse.