Sunday, October 2, 2011

The Devil is in the Debit Card Details

"Debit card fees could be new norm; Bank of America, Wells Fargo, Chase lead possible trend" September 30, 2011|By Ben Protess and Tara Siegel Bernard, New York Times

NEW YORK - Bank of America, the nation’s biggest bank, said yesterday that it planned to start charging customers a $5 monthly fee when they used their debit cards. It was just one of several new charges expected to hit consumers as new regulations crimp banks’ profits.
 
Oh, those POOR, POOR, BILLIONS-IN-PROFITS PER QUARTER BANKS!!!

Wells Fargo and Chase are testing $3 monthly debit card fees. Regions Financial, based in Birmingham, Ala., plans to start charging a $4 fee next month, while SunTrust, another regional powerhouse, is charging a $5 fee. 

It's a CASH ONLY POLICY around here!

The round of charges stems from a rule, which takes effect tomorrow, that limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase. The rule, known as the Durbin amendment, after its sponsor Senator Richard J. Durbin, is part of the Dodd-Frank financial overhaul law.

Until now, the fees have been 44 cents a transaction, on average. The Federal Reserve in June agreed to cut the fees to about 21 cents. Although the fee amounts to pennies per swipe, it adds up across millions of transactions. The new limit is expected to cost the banks about $6.6 billion in revenue a year, beginning in 2012, according to Javelin Strategy and Research. That comes on top of another loss, of $5.6 billion, from rules restricting overdraft fees, which went into effect in July 2010.

Even though retailer groups had argued that lower fees were important to keep prices in check, consumers were unlikely to see substantial savings. In fact, they are simply going to end up paying from a different pot of money.  

But banks are your friend.

Or as Jamie Dimon, chief executive of JPMorgan Chase, put it after passage last year of the Dodd-Frank act, “If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger.’’ 

I was told the burger and soda was $5 and now you are telling me it's $10!

Chase is now charging customers for a paper statement. It also, like most other banks, scrapped its debit card rewards program. And customers that Chase inherited from Washington Mutual no longer enjoy free checking accounts.

The bank is also exploring a number of other fee increases, including for online banking, according to people with knowledge of the matter.  

They are just GRUBBING AROUND for EVERY F***ING CENT, aren't they!!!? 

What F***ING SCUM!!!!!!!!!!!!!!!!!!!!!!!!!

Bank of America’s debit fee is steeper than most of its competitors’, reflecting the broader challenges the bank is facing after the financial crisis. The bank has introduced an online-only account that charges customers for doing business at a local branch. It also plans to apply its new debit card fees to anyone who uses the card to make recurring payments like gym fees or cable bills.

Citibank is one of the few that said it would not introduce a charge for debit card use....

Meanwhile, HSBC said that it recently increased an ATM fee - to $2.50 from $2 - for certain customers when they used a competitor’s ATM. It also recently introduced a debit transaction fee of 35 cents, although the first eight transactions are free.

And at TDBank, customers will now have to pay $2 for using ATMs outside their network.

Over the past few years, consumers have increasingly shifted their spending to debit cards from credit cards, in large part to curb their spending. But some analysts predicted that the fees could prompt consumers to return to credit cards - a more lucrative alternative for the banks....

They got you coming and going, huh?


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Good thing there is a small, community bank around the corner, right?

"Smaller banks see opening in card fees; Aim to poach Bank of America clients" by Megan Woolhouse and Todd Wallack, Globe Staff / October 1, 2011 

Look at the corporate paper and its use of words. 

Yup, the small banks are trying to steal something they don't have a right to.
 
In-f***ing-credible!

Massachusetts community banks are vying to win over Bank of America customers outraged by news that the nation’s largest bank will charge debit card holders as much as $60 a year to use their cards.

Bank of America “struck the third rail on this one,’’ said Joe Bartolotta, a spokesman for Eastern Bank, based in Boston. “We think it will be an opportunity to attract new customers. People are fed up with fees.’’

The new debit card fees are the latest example of banks trying to squeeze more out of customers to make up for the cost of increased regulations, continued low interest rates, and other changes that have cut into profits. At least two other large banks, JPMorgan Chase and Wells Fargo, are market-testing fees for debit cards.  

You have SUFFOCATED US, and we are NO LONGER BREATHING so you can LET GO!!!

And yesterday, Citizens Bank, the second largest in Massachusetts behind Bank of America, said it is cutting back on premiums it offered for debit card uses, such as cash-back rewards and points that can be traded in for gift cards and merchandise....

Bank of America and other major banks have blamed the new customer charges on a provision in the federal Dodd-Frank financial overhaul law cutting in half the amount that banks can charge per debit card purchase, to 24 cents from 44 cents.

A study by Javelin Strategy & Research, a financial services consulting company in California, estimated the cap could cost banks $6.6 billion a year in revenue.

Bank of America officials declined to comment on efforts by its competitors to lure its customers away.

Michael Ratty, a longtime Bank of America customer, said he has stayed with the bank despite the steady introduction of new fees in recent years. But the new debit card fee, he said, could be “the last straw’’ that leads him to switch.

The South End resident said he typically uses his debit card two or three times a day, a habit that the bank had encouraged by offering special incentives for frequent use.

“It’s not about the money,’’ said Ratty, 32. “It’s mixed signals, and it’s kind of a slap in the face.’’

Or something worse from behind.

The debit card fee is the most recent announcement by Bank of America about changes to its fee structure. The company, which is headquartered in Charlotte, N.C., and has 2 million Massachusetts customers, offers a type of checking account that charges $4 a month for online bill payments.

Still trying to recover from the housing bust and financial crisis, the company also recently announced plans to cut 30,000 jobs.  

Where did all that damn bailout money go!?!? Sitting on it and salaries?

Consumers willing to take the time and effort to switch banks may find such moves are increasingly complicated. More customers use online and automated bill-payment programs, and Bank of America offers nearly ubiquitous ATMs.  

Meaning MOST PEOPLE just take the anal invasion rather than change.

But community bank officials said they were doing their best to take advantage of possible Bank of America defections.

Belmont Savings Bank, for example, announced it would begin aggressively marketing a “no-$5-fee’’ free debit card next week.

Rockland Trust, a community bank south of Boston, issued an announcement promoting a no-fee debit card offering double rewards.

“We don’t think it’s right for customers to have to pay to get access to their own money,’’ Ralph Valente, senior vice president of marketing at Rockland Trust, said yesterday.

“Customers should not have to worry about following a lot of rules, regulations, or paying a lot of fees,’’ he said....  

Sounds good, right? 

Now the OTHER SHOE DROPS:

Rockland Trust’s Valente said he couldn’t completely rule out adding debit card fees 

Yeah, ONCE THEY GET YOU TO SWITCH they are going to SLAP THE FEE ON YOU!! 

Yup, YOUR "FRIEND" the community bank!!!

“The regulatory environment is an interesting one and I would not go on record saying, ‘There’s no way we’d ever do something like this’,’’ he said. “But my feeling right now is that it’s not customer friendly and we are not considering doing it.’’

John Rosenfeld, head of deposits at TD Bank, which has more than 1,200 locations including 154 in Massachusetts, said its call center was “on fire’’ following the Bank of America announcement.

Customer wait times were lengthy, he said, due to the volume of calls from people who wanted information about his bank’s accounts and fees.

“We don’t charge debit fees today and we don’t have any plan to,’’ Rosenfeld said.

“It’s an evolving market. What our competition is doing is creating enormous opportunity for us to grow our customer base.’’

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