Debit Card Fee ‘Flop’ Leaves Banks Seeking $8 Billion in Revenue

[marmar]

(Bloomberg) Bank of America Corp. (BAC) and its U.S. rivals may struggle to replace the $8 billion in revenue lost because of federal debit-card rules after abandoning plans to extract more fees from customers.

Bank of America said yesterday that it wouldn’t charge debit-card users $5 per month, four weeks after the firm’s announcement of the fee sparked a backlash from customers and lawmakers. The lender, which followed JPMorgan Chase & Co. (JPM) and Wells Fargo & Co. (WFC) in dropping plans for such charges, also won’t insert debit fees into checking accounts introduced next year, said Anne Pace, a Bank of America spokeswoman.

Card issuers must seek other ways to replace revenue and trim costs after the Federal Reserve capped fees on debit-card purchases last month at about half the previous level. The limits, mandated by the Dodd-Frank Act, may cut annual revenue by $8 billion at the biggest U.S. banks, according to data compiled by Bloomberg Government.

“They won’t be able to get it all back because the strategy they were moving towards was a flop,” said Bart Narter, a senior banking analyst at consulting firm Celent. “They might start to require higher balances, or direct deposits from your paycheck, and they’ll try to change consumer behavior to make them less expensive to serve.” .............(more)

The complete piece is at: http://www.bloomberg.com/news/2011-11-02/debit-fee-flop-leaves-u-s-banks-looking-for-8-billion-in-lost-revenue.html

[lib2DaBone]

1. Replace the $8 Billion? Maybe pay the CEOs smaller bonuses?

[NightWatcher]

2. guess they should've saved some of that bailout money instead of going Bonus Bananas

plus, how much of that $5 was going to bonus and ceo pay anywhoo?

[NV Whino]

3. Don't worry

They'll find another way to make us pay.

[no_hypocrisy]

4. Let them charge more interest on loans to commercial customers.

[FarCenter]

5. Looks like they have a push on credit cards with a reward "cash back" feature

These cards incur a higher transaction fee to the merchant, and the bank is splitting the higher fee with the customer by giving cash back, typically 1% of the purchase.

Customers should switch to these, since they get an effective 1% discount on purchases and much better consumer protection under credit card regulations than they would by using a debit card.

Just be sure to charge no more than you can pay in full each month. And be sure that the credit card carries no annual fee.

[Brickbat]

6. "Struggle" "revenue lost" "replace revenue" -- ROFLMAO.

I mean, seriously.

[piratefish08]

7. how about the banks seek another place on MY ASS TO KISS

fuck em.

maybe a collapse is overdue.

[lonestarnot]

12. What he/she said!

[Bluenorthwest]

8. My local Wells Fargo employee when I told her the fee was

a stupid thing to do at this time: 'We have to make a profit'. I then pointed out to her that in the same quarter of last year, Wells Fargo profited 3.4 billion dollars, single quarter, so what she meant was 'we have to make even more profit than we already make, by any means necessary'. I told her the fact that she was claiming they made no money without charging fees and extreme interest was just insulting, and that people were no longer amused by the deceptive language. I told her it was odd to me that she'd defend a decision that would cost her branch many customers while she personally gained nothing at all from her lies, and it is a lie to claim 'we need to make some money' when you are making billions each quarter. This was a couple of weeks prior to the start of OWS. She was so smug, she acted as if they were nearly broke, as if any and all decisions they made must be accepted, as if such abuse of customers was a good idea, to kick that profit up to 4 billion every 3 months.
I asked her how much exactly Wells Fargo felt it had the right to 'earn' each quarter. She had no answer, but was sure they had a right to that extra fee, a right, she said.
They had been my bank since the mid 80's.

[Javaman]

9. Did you close your account? nt

[qb]

10. Where are the Republicans who insist that everyone must live within their means?

Fuck the banks.

[Uben]

11. My first cousin is a local bank president.....

...he's been in the banking business for thirty years or better. After he was appointed president of this bank, he tried to get me to put my money in his bank. I told him my credit union was treating me fine and I wasn't interested in moving my money. It's not millions, but I do keep a lot locally, and he knows how deep my pockets are. I haven't done any business with him in the past 25 yrs or so, mainly because I haven't needed to borrow money. As bank presidents go, I figure he's pretty typical, playing the game like they all do.
I don't use a financial advisor, either. It didn't take long after accumulating some wealth for me to find out they are not trying to make me money.....they're in it for themselves! So, I make my own stock trades, as well. Since I started handling things myself, I have made a lot more money.
Got money in a 401K? You're getting screwed. Take it out and invest it yourself. Without access to it, the banksters can't get it, and you know that really pisses them off. We have seen how they are willing to make extremely risky investments with other people's money. Can you say "derivitives"? They make the money, you take the loss.

The gig is up! They have been outed. But, you can bet your ass they are at this very moment working on ways to screw you out of your money. It's what they do. IT"S ALL THEY DO! Watch every statement. Question fees and do the math.

[lonestarnot]

13. 401Ks are a scam.