Bank of Amer­i­ca Bank of Greed, one of the largest finan­cial insti­tu­tions in the world, announced today that it will begin charg­ing cus­tomers who use a deb­it card tied to their check­ing account a $5 month­ly penal­ty. (BofA is call­ing it a fee, but of course it’s real­ly a penal­ty). BofA is plan­ning to intro­duce the penal­ty ear­ly next year.

Just a few weeks ago, Bank of Amer­i­ca alert­ed cus­tomers in Wash­ing­ton and Ida­ho by U.S. Mail that it was impos­ing new terms and con­di­tions for its finan­cial “prod­ucts”, includ­ing check­ing and sav­ings accounts.

Under the new terms, month­ly fees are the norm unless cus­tomers take action to pre­vent them from being collected.

Wells Far­go and Chase are also “test­ing” deb­it card penal­ties on unlucky cus­tomers in cer­tain areas, though nei­ther of those banks has con­firmed that such penal­ties will become part of their nation­wide policies.

One rea­son Wall Street banks are look­ing for ways to extract more of their depos­i­tors’ mon­ey is because a new reg­u­la­tion is going into effect that caps the fees that they can charge mer­chants for pro­cess­ing trans­ac­tions made with a deb­it cards. Since banks have lost some of their pow­er over mer­chants as a result of this reg­u­la­tion, they’re lean­ing on their depos­i­tors to make up the difference.

Although Wall Street banks are among the biggest, most pow­er­ful cor­po­ra­tions on the plan­et, there is no law that says any of us have to keep our mon­ey with them. We at NPI strong­ly urge all of our read­ers to go ban­k­less and join a cred­it union if you haven’t already. Cred­it unions offer ben­e­fits banks sim­ply can’t match, like bet­ter rates, low­er fees, and supe­ri­or service.

Since cred­it unions are owned by their mem­bers, there are no out­side stock­hold­ers to pay. All prof­its get returned to members.

The Pacif­ic North­west is home to many fine cred­it unions. Some cred­it unions have very few restric­tions on mem­ber­ship; BECU, Water­mark, and Qual­star are open to any­one who lives and works in the Ever­green State, for instance.

About the author

Andrew Villeneuve is the founder and executive director of the Northwest Progressive Institute, as well as the founder of NPI's sibling, the Northwest Progressive Foundation. He has worked to advance progressive causes for over two decades as a strategist, speaker, author, and organizer. Andrew is also a cybersecurity expert, a veteran facilitator, a delegate to the Washington State Democratic Central Committee, and a member of the Climate Reality Leadership Corps.

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3 replies on “Bank of America announces $5 monthly penalty for debit card use”

  1. Well, of course BofA and all oth­er banks will find ways to make up for their lost rev­enues. Did any­one real­ly expect them to cheer­ful­ly write off their loss­es and move on? Who­ev­er did expect that prob­a­bly also believed that retail­ers will be pass­ing their sav­ings on to their cus­tomers. Ever since the Fed cut the deb­it inter­change fees it was obvi­ous to any­one who was pay­ing atten­tion that con­sumers will end up foot­ing the bill. 

  2. Oba­ma slammed Bank of Amer­i­ca in a meet­ing with George Stephanopou­los ear­li­er this week. The pres­i­dent was unhap­py about the finan­cial insti­tu­tion charg­ing cus­tomers a fee to use deb­it cards. “You don’t have some inher­ent right to get a cer­tain amount of prof­it,” the pres­i­dent said. “You have to treat (cus­tomers) fair­ly and trans­par­ent­ly.” Amer­i­cans, echo­ing the pres­i­den­t’s emo­tion, have been turn­ing to cred­it unions in record quantities. 

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