Monday, October 3, 2011

My Two Cents on Debit Card Fees

Here it is: my first current event-related blog post! Normally I'm not a very opinionated person, at least not to the point that I'll argue with someone about it. This media circus that has been going on about every single thing Bank of America does has gotten to be a little ridiculous, though. If you asked me what I like least about my job at the bank I would tell you a) mean people, and b) responding- or trying to bite my tongue- when customers come in and recite whatever it is they have heard on the news about us. If I had a nickel for every time someone asked me if my job was in jeopardy, or made a sarcastic comment about the bailout money, or blamed any fee related to their account on the mortgage issues... well, I'd probably have about $7.65. That's 153 nickels!

With regards to the latest news about the debit card fees, I have to say I was just as shocked and outraged as every other customer when I initially found out about it. However, today in my training my teacher- who is absolutely awesome, by the way- explained it really well. After the conversation was over I felt a lot better about it, and ready to face a stampede of disgruntled customers. Apparently the passing of the Dodd-Frank Act, which was put in place to regulate debit transactions, is the culprit. NOT mortgage issues carrying over into consumer banking or whatever else the media will have you believe. As part of the act, a cap was put in place to limit the amount that merchants would have to pay to banks (only those that have over a certain amount of money on deposit. Read: big banks) whenever a debit card is used. Prior to this, banks like BOA received between $1.40 and $1.70 per swipe. The cap will drop that number down to about 40 cents. In an effort to recoup the lost revenue the bank is now imposing a monthly fee for those customers who choose to use debit cards for purchases (not at the ATM or within the bank). Makes sense, right? In theory, the merchants will now be able to lower their costs because they're not paying so much to banks, so as consumers we should see that money coming back to us. We'll see if that actually happens- wishful thinking never hurt.

Another thing my teacher pointed out was the fact that banks have more or less shot themselves in the foot by being the only business to lead customers to believe that its products and services are worthless. There's now this expectation that all accounts and other services should be completely free, otherwise it's highway robbery. In any other industry it's perfectly acceptable and normal to pay for goods, but for some reason banks can't catch enough grief for trying to run a profitable business. It's absolutely ludicrous that people will spend $5 a day on their morning latte or $4.99 for an app on their phone, but a $5 monthly fee for something that helps you access, manage, and protect your money seems to be starting riots. Get it together, folks.  


  1. I totally understand that BofA lost money. Actually, Anthony's dad who is a big time executive financial guy, was telling me all about the Dodd act last night. No, $5 a month is not a lot. But does BofA need my $5 more than me? (reminder: a law student with no income). Doubtful. I mean, I'm going to pay it obviously. There isn't another option really. Just another annoyance... definitely not cause for a riot. (have there really been riots?) Have fun at the bank this week! :)

  2. I guess there's always the question of who pays and who doesn't and where to draw that line. The good news is that one day when you're a wealthy lawyer you'll be considered a "preferred" customer at whatever bank you bring your business to, and this will be one of the perks of your account! The riot thing was an exaggeration... but some people have had some pretty extreme reactions. And I hope you didn't think this was directed at you, either! Our teacher at training said some really cool stuff that helped me come to terms with it and so I felt inspired to share it. PS: do you have a CampusEdge checking account? If so, no fee for you!

  3. Problem solved with CammpusEdge checking! Sticking it to the man!!! Well, not really with all the overdraft fees I've paid them in the past. Can't win 'em all. Glad your training went well!