Flashback to 2011: BofA waffles on new fees
To borrow Yogi Berra's words, it's déjà vu all over again: Bank of America has backed away from plans to roll out new fees on its checking accounts this year, according to a report from the Wall Street Journal .
Bank of America's proposed checking account fees would have reportedly affected 10 million consumers, or about 20 percent of the company's customers. But despite testing new fees in select markets throughout the year, the bank appears to have delayed plans to implement them out on a national scale.
Bank of America experienced severe backlash in 2011 when it proposed charging consumers a $5 monthly fee for using their debit cards . This fee would have been in addition to regular ATM and purchase transaction fees. The move was met with stiff resistance, and the fee plan was scrapped soon after it was announced.
Mixed signals on Bank of America fees
In an interview with CNBC, Bank of America CEO Brian Moynihan disputed that the bank had made any new decisions regarding fees.
"That's not true. We're making decisions all day long," Moynihan told Becky Quick on CNBC's Squawk Box when asked about the Wall Street Journal report.
Moynihan went on to discuss the importance of "relationship banking" with its retail customers and how consumers who have a broader relationship with Bank of America will be able to avoid banking fees. The comments seemed to support the idea that these checking account fees are intended to drive consumers to use additional bank services, such as direct deposit or mortgage loans.
The death of free checking?
Regardless of whether the Bank of America new fees come to be, free checking is becoming harder to find today. Recent federal regulations have cut into bank revenues from swipe fees and overdraft charges. Many banks have since felt the need to increase fees on basic accounts that otherwise make little or no money for the institution.
According to the latest MoneyRates.com Bank Fees Survey , only about one-third of checking accounts are free of monthly maintenance charges. However, in some cases, the fees on other accounts can be waived if consumers maintain certain minimum balances or use other bank services, such as paperless statements or direct deposit.
As options for free checking dwindle, more banking customers may seek out alternatives to big banks. Online banks and credit unions often provide free checking options, and as a bonus, savings account interest rates and CD rates may also be higher at these institutions.
It remains to be seen whether consumer resistance will eventually stem the tide of new service charges at major banks. So for now, big bank customers may want to keep a close eye on their monthly statements.