BofA CEO Brian Moynihan Says Company Has 'Right To Make A Profit'

Bank of America CEO Brian Moynihan has said his bank’s new $5 fee debit card fee is justified because the bank “has a right to make a profit,” according to CNN Money.

Bank of America announced last week that it would begin charging customers $5 per month to use their debit cards for purchases starting in early 2012. Customers who only use their debit card to access ATMs won't be charged. Moynihan said the fee was necessary in order to have the "ability to be profitable" in a new banking environment with increased regulations, including a cap on the the debit card swipe fees banks charge merchants, according to CNN Money.

The debit card fee is one of a rash of other charges big banks are imposing on their customers allegedly to recoup losses caused by new regulations in the Dodd-Frank law -- legislation passed by Congress in the wake of the financial crisis. Citibank told customers via letters that the bank would start charging some account holders $20 for low balances. Wells Fargo announced in August that the bank would start testing a $3 debit card fee.

The Bank of America fee prompted criticism from almost all corners after it was announced last week. President Barack Obama told ABC News that banks need to treat their customers “fairly and transparently.”

"Banks can make money," he added in the interview. "They can succeed, the old-fashioned way, by earning it."

Senate Majority Whip Dick Durbin (D-Ill.) encouraged customers to leave Bank of America in response to the fees. Rep. Brad Miller (D-N.C.) said after the fee was announced that he plans to introduce legislation that would make it easier for customers to swap their direct deposit, automatic bill paying and other automated features when switching banks.

Ordinary consumers are also lashing out at the Bank of America fees. Debit card fees was a trending topic on Google the day after the announcement and users took to Twitter to and mock the bank. One woman in Washington D.C. gathered 137,000 signatures protesting the fee; she plans to deliver the petition to a D.C. branch on Thursday.

But not all of the reactions to the fee were critical. Banking industry officials said the new Dodd-Frank regulations forced Bank of America’s hand by changing the retail banking environment.

"As a direct result of the Durbin Amendment, consumers have started paying for financial services they previously enjoyed free of charge," American Bankers Association President Frank Keating said in a statement after Obama criticized the fee.

Comments

[mtrent25]

07:04 PM on 11/06/2011

Come on one and all, lets find a Credit Union, with draw what money we have in the bank and put it all in that credit union, we'll save money, because is no fee

[TooManyTequilas]

04:44 PM on 11/01/2011

Yup, you do have a right to make a profit. I'd also like to see millions of depositors enjoy their right to suddenly make a concerted run on your bank storefronts everywhere to remove every last dime they have in your institution...you know those same dollars you're so glad to loan back to them at outrageous interest rates. Oh, sorry, that would just set off another wah wah cry to your Washington pals for more baksheesh courtesy of those same ex-depositors wouldn't it?.

[imanormalalien]

12:38 PM on 10/13/2011

As a Bank of America customer, I am personally offended by the implementation of $5.00 monthly fees on their debit cards. In fact, I am outraged. They get bailed out by tax payers for their mistakes, and then seek to punish those same people who helped them get back on their feet? It’s ludicrous. The Dodd-Frank law was put into place to prevent future financial crises from occurring, through increased supervision and regulation in the banking industry. If Bank of America truly cared for their customers, they would have innovated to find a way to circumvent laying the costs on them. If Bank of America, and other banks, truly cared for anything apart from making a profit, the Dodd-Frank law would not be put into place, as the 2009 financial crisis would not have occurred. Clearly, Bank of America’s deluded view, that they “do a great job” for their customers, is not reciprocated, as is evident in the increased prominence of the Occupy Wall Street protests.

[concerned tax payer]

10:03 PM on 10/12/2011

What is American about Bank of America?
Failed management and bailouts?
Overpaying for assets and mismanaging risks?
Reckless banking and over leveraged adventures using tax payer money?

That does not sound American... it sound UnAmerican.

More appalling than the failure of the management team to recognize a need for humility is the arrogance and misplaced confidence in a failed management team and a mockery of what leadership should be.

Regardless who leads this bank, I do hope it fails soon and we can move on. I encourage a run on this bank, as it presents no compelling reason to continue to haunt us after we provided tax dollars to bail out the banking system. And there are others that should go down too!

Visit www.mybadbankexperience.com

[concerned tax payer]

09:59 PM on 10/12/2011

Get out of America and take that name off of your corporate name. Go to China and good riddence.

You have a right to make a profit. We have a right to create a run on your bank. And we may. You offer no value, have robbed the tax payers, have mismanaged operations, profitability, and marketing, and have been a waste of a management team.

You deserve jailtime, and an FDIC takeover.

Keep increasing your charges - let the consumer speak with their feet and their wallet. I hope you fail - the sooner the better!

[Mike Strange]

04:03 PM on 10/10/2011

If this CEO does not get jail time for abusive lending and forecloses practices we should riot-- He is a multimillionaire while normal people are losing their homes because of his practices -- what the hell is going on iwth our judicial system -- they are a joke.

[uneeda]

11:28 AM on 10/10/2011

the easiest profit to be made would seem to be shorting bank of america

[munki]

07:36 AM on 10/10/2011

What is your definition of making profit?

[keepinguinformed]

10:23 PM on 10/09/2011

ok, let me get this right moynihan says that the bank of america has the right to make a profit? this is why they are charging the $5 fee; because the government put cap on the amount of money that they can bleed companies for, so, instead.. they are going to now bleed their customers instead! this has to be done people so that they can collect those $100,000 bonuses at the end of the year!

[SiriusGD]

05:20 PM on 10/09/2011

I made my statement a long time ago that I would never bank with BofA. And after Wells Fargo messed me over, I left less than a dollar in my account and each month they have to send me a statement... for the last four years... LOL!

[nothingchanges]

11:12 AM on 10/09/2011

BofA CEO Brian Moynihan Says Company Has 'Right To Make A Profit'

Yet they got bailed out instead of having to "take" their losses.

If socialism is so bad, why do American Corporations get to practice it..........at our expense?

[tpeserik]

10:24 AM on 10/09/2011

The intent of the original banks in the Middle Ages was to facilitate trade. The idea that it's cool to use a bank as a profit-generating vehicle is a creation of the 20th century. I don't think banks have a "right" to it.

[rabiddog6708]

09:47 AM on 10/09/2011

Time to close out your BankOfAmerica accounts and move to another bank. Enough customers do this and they will get the message.

[SiriusGD]

05:21 PM on 10/09/2011

I closed mine with them a long time ago. I saw them as cheats as far back as the eighties.

[evilchihuahua]

09:44 AM on 10/09/2011

The irony here is that they have run the numbers based on X amount of customers that will leave over this and have determined that it will still be profitable to do this.
What does this say about our predictability?
An all out effort to show them they are wrong is needed.
We are not the sheep they have come to loath and abuse.
If everyone got one person that would not normally change to change,
then we may have an impact.

[Raccoon1]

09:06 AM on 10/09/2011

Where in the Constitution does it say banks have rights?

[StinkyMoBub]

09:32 AM on 10/09/2011

Exactly what I was thinking - although, since the conservative activists on the SCOTUS have determined that corporations are indeed "persons", I'm not surprised...