The 2nd largest bank in the US, Bank of America Corp., has decided to hold off their earlier plan of introducing new checking account fees. Incidentally, preliminary reports suggested that introduction of those fees could have affected as much as 10 million customer by end of this year. The bank went ahead with a similar fee system in 2011 as well. That decision resulted into numerous protests over the consumer banking fees. It seems that the Bank of America Corp. does not want a repeat of the same incident this year as well. This news was reported by the Wall Street Journal. The official spokesperson of Bank of America declined to give any comment on this matter at this moment. Incidentally, not only the regular customers, but the regulators also don’t like fee hikes by the banks. Such fee hikes according to many is a punishment for people with low income.
The report also states that the bank officials will currently be conducting a review of the retail banking business of the bank. In the 2nd half of next year, they will again consider introducing new fees, if the situation still demands the same. The news report cited people with knowledge of the bank’s policies as sources.
The entire banking industry of US is going through a tough phase at this point of time. Not only that the interest rates are low or economic growth is slow, but, the new financial regulations imposed by the US policymakers are also hurting the bottom lines of the banks. Incidentally, other renowned banks of the country such as Wells Fargo & Co and JPMorgan Chase & Co came up with plans that involve raising fees. Not only that, but, they also plan to introduce schemes which will be lucrative enough to customers thereby enticing them to try out more products of these banks.
The Bank of America is currently facing losses because of the customers who always keep modest amount of money in their accounts and never use banking products such as mortgage loans or credit cards. Most of these customers have less than $50000 as the household income and the bank on an average incur loss of $200 per customer per year. Incidentally, such customers make 20% of the total customer base of the bank.