Bank of America (NYSE:BAC) wants to charge customers of basic checking accounts $5/month. They recently faced extreme consumer backlash after their attempts to charge fees for debit card use. They garnered lots of negative publicity and departing customers (I personally know some people who left).
When consumers have lots of options for free checking, Bank of America wants to be a pioneer in tacking on new fees. Some recent posts on SeekingAlpha about Bank Of America say: It is "Time To Be A Core Holding"; it may have "Turned A Corner"; or that it's "Undervalued."
Elsewhere the opinion is a little bit different, calling the bank "desparate."
Personally I agree with the desperate part and that is reflected in other aspects of their business, also from my personal experience. Bank of America is the only bank in 5 that I have dealt with for a mortgage that charges a fee to pay a mortgage before the 15th of the month. It is fee-free only until the 6th of the month at Bank of America. Also the Bank of America (Worldpoints Visa Signature) credit card I have has points, but unlike all my other credit cards, they do not translate to 1% cash back. I do not use that credit card, and I was not happy about Bank of America taking over my mortgage from EverHome. I say avoid the bank and and avoid the stock.
I'm a longtime Wachovia customer whose account has been taken over by Wells Fargo (NYSE:WFC) and who lost a lot of money from Wachovia stock. I didn't have much to complain about Wachovia's free checking, which threw in more items for free based on the amount of money you were willing to keep in checking. However, after the takeover by Wells Fargo, things are beginning to go downhill. Money is withdrawn for Bill Pay upto 5 business days before the payment date, and not when the payee deposits the check. Also they are taking away free safety deposit boxes for their version of the high-end checking accounts.
I recently opened a Fidelity Cash Management account, and I plan on moving everything there - no fees of any kind are awesome (free ATM reimbursement worldwide, no foreign currency fees) amongst other benefits. Scottrade bank offers similar features too (ATM reimbursement nationwide).
However, on the flip side, it is possible that Bank of America wants to rid itself of the non-profitable customers. Maybe after the backlash from the debit card fees, they realized that they lost their worst customers and want to try ways to get rid of a few more.
I say join me in saying bye to traditional banks. Maybe when we all realize that the other options out there are better (credit unions, cash management accounts), big banks will come to their senses.
Disclosure: I am long WFC.
Additional disclosure: My WFC ownership is a remnant of my Wachovia holdings, mostly held due to small amounts and laziness.