Criticism of Bank of America’s $5 monthly fee for debit card purchases reached all the way to the White House this week, when President Obama himself blasted the bank for charging the new fee. And he suggested that the newly-established Consumer Financial Protection Bureau has the power to prevent the bank from charging such fees.
“Well you can stop it,” Obama said in an interview with ABC News host and former Clinton administration official George Stephanopoulos. “This is exactly why we need this consumer financial protection bureau that we set up that is ready to go.”
[Related Article: Many Consumers Outraged by Bank of America's Big New Debit Fee]
The president has nominated Richard Corday, formerly Ohio’s attorney general, to become the bureau’s first director. That nomination may move forward on Thursday, as the Democrats who control the Senate Banking Committee plan to vote for his confirmation. Cordray faces a more difficult fight in the full Senate, where Republicans have announced they will oppose any nominee until the president agrees to limit the new bureau’s power.
Before that long process is eventually resolved, the president expressed hope that other banks will not follow Bank of America’s lead.
“My hope is that you’re going to see a bunch of the banks say, ‘You know what, this is not good business practice,’” he said. “Rather than taking a little bit less of a profit, rather than paying multi million dollar bonuses, let’s treat our customers right.”
Bank of America plans to start charging the $5 fee in early 2012.
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Image: Center for American Progress Action Fund
Christopher Maag Contributing writer for Credit.com, Chris graduated with honors from the Columbia University Graduate School of Journalism, and has reported for a number of publications including The New York Times, TIME magazine and Popular Mechanics. Have a question for our experts? Email them at CreditExperts@Credit.com.
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The Durbin Amendment is solely responsible for the wave of new bank fees. BofA and all other big banks are looking for ways to make up for lost revenues and, frankly, I can’t blame them, even as I don’t enjoy paying higher fees.
It’s been abundantly clear ever since the debit interchange limit was first proposed that it was ultimately going to hurt consumers in the form of higher fees and that is precisely what is currently happening. http://blog.unibulmerchantservices.com/banks-discontinue-debit-rewards-programs
Agreed and now they want to regulate more! Scary. Then they are going to have layoffs at BoA and Obama will knock that. Ugh – this is scary stuff
Are freakin serious? Do you understand that bank of america and other large banks, as the article points out, still give out huge paydays to their execs?? How can you rationalize this fee when clearly the big banks are not hurting???
With the president’s record on flip flopping and capitulating I wonder how long it will take for him to back away from this strong statement against BofA.
Way to go President Obama! Now, BofA needs to get their act together. I can’t believe they are now charging their customer $5 per month ($60 per year) for using debit card. I hope this is not a new trend for debit cards…
The President said. “My hope is that you’re going to see a bunch of the banks say, ‘You know what, this is not good business practice…let’s treat our customers right.” I Love my President but again I feel he has missed the point.
Business doesn’t think this way. And won’t. Ever.
What the President should have said was, “This bank was saved by taxpayer monies. They are now paying back those very taxpayers by gouging them with a fee that will result in a billion dollars of profit for doing absolutely nothing different before the fee. They are greedy, unethical, illegal and immoral and will be investigated. They WILL not charge this fee.”
I don’t understand why Bank of America customers, especially the 99%ers don’t close their accounts and move to a private. That’s exactly what I did over a year ago when Chase dropped every credit card limit to the balance I owed on them. Needless to say I closed my savings and checking with Chase and moved to a smaller, private bank. And when I walk in the door, I treated like they appreciate me and my business. I never had that with Chase. So people, start closing your accounts, very simple solution.