Home > Personal Finance > Obama Blasts BofA’s New $5 Fee

Comments 7 Comments

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.

[Featured Product: Looking for credit cards for good credit?]

Image: Center for American Progress Action Fund

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

  • http://www.unibulmerchantservices.com Greg

    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

    • Katie

      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

      • Jason

        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???

  • http://www.facebook.com/profile.php?id=1567753528 HMax_Sol

    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.

  • Pingback: Adam Levin: Bank of America, Adam Smith and a Fee Market System | My Vally()

  • http://ultimatesmartmoney.blogspot.com/ UltimateSmartMoney

    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…

  • Ames Adamson

    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.”

  • Frank

    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.

  • Pingback: I’m a One Percenter Who’s Pre-Occupied with Wall Street | My Blog()

Certain credit cards and other financial products mentioned in this and other articles on Credit.com News & Advice may also be offered through Credit.com product pages, and Credit.com will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Our Owners

Credit.com is owned by Progrexion Holdings Inc. which is the owner and administrator of a number of business related to credit and credit repair, including CreditRepair.com, and eFolks. In addition, Progrexion also provides services to Lexington Law Firm as a third party provider. Despite being owned by Progrexion, it is not the role of the Credit.com editorial team to advocate the use of the company’s other services. In articles, reporters may mention credit repair as an option, for example, but we’ll also be sure to note the various alternatives to that service. Furthermore, you may see ads for credit repair services on Credit.com, but the editorial team isn’t responsible for the creation or implementation of those ads, anymore than reporters for the New York Times or Washington Post are responsible for the ads on their sites.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team