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Bank of America to hold off on new fee

Dec. 1, 2012 at 5:36 PM   |   Comments

CHARLOTTE, N.C., Dec. 1 (UPI) -- Bank of America is postponing plans to hit about 10 million customers with new checking account fees, sources told The Wall Street Journal.

The nation's second-largest bank by assets will not impose the fees until late in 2013, the Journal reported Saturday.

The delay in the new checking account fees is aimed at forestalling a repeat of the negative reaction -- essentially a customer revolt -- that forced the bank to reverse a decision on imposing debit account fees of $5 per month in 2011.

The bank industry is balanced between a slow economic recovery that makes raising fees difficult and impatient shareholders looking for higher profits.

But the whiplash BofA sustained from the debit account fee that backfired was considered a serious setback.

"Banks cannot continue to be on the front page," industry analyst Paul Miller at FBR Capital Markets told the Journal.

"Low-balance depositors don't have a lot of money for you to make money off."

Customers with modest balances in their bank accounts are less profitable for retail banks, as they don't borrow through credit cards and mortgage loans as much as wealthier customers, the newspaper said.

For now, however, BofA is focusing on loans and signing up new accounts. It's mobile banking option is currently responsible for signing up 10,000 new customers per day, BofA said.

Topics: Paul Miller
© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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