Friday, October 7, 2011
Investigate 'unfair and abusive' bank fees
October 6, 2011
It would be tough to come up with a worse time for Bank of America to saddle customers with a $5 fee every month they use their debit card. The nation's largest bank has been struggling mightily, yet it is apparently willing to drive away customers with more fees. Taxpayers rescued Bank of America with a $45 billion loan, and now it's about to take advantage of many of the same taxpayers by making them pay extra money, just to be able to use their money.
That's why we think Congress and federal regulators should investigate and ask Bank of America how it can justify this fee. The bank may argue it has to make up for lost revenue from fees collected from retailers, fees the law now says are excessive. But banks can still collect an average 24 cents from retailers every time a customer makes a debit card purchase. That's more than the average 8 cents the Federal Reserve estimates it costs a bank to process a debit purchase when you use a PIN number.
It seems abusive and unfair for Bank of America to slap an additional $5 monthly fee on consumers for debit card purchases, even when consumers use the card only once that month. This decision comes as millions of Americans are already struggling with a whole raft of dubious fees, and this one doesn't even appear to be linked to the real cost of providing the service.
For the debit cards fee controversy see also here, here, here, here and here.
Posted by Yulie Foka at 8:01 AM