BofA Fees
Out of context: Reply #25
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- ItTango0
As a former banker (while in school), I can tell you that fees are, and always have been, the only reason retail banking exists. Retail (general consumer products) vs Private Wealth Management or Commercial Banking.
Since the banking relationship for most retail customers centers around a basic checking account, there is little or no money to be made by their bank. The most common loan product for these customers is Overdraft protection.
In an effort to turn basic retail customers into profitable investments, banks roll out the fees. e.g. In the early 90's banks figured out that simply returning a check due to an overdraft was not nearly as profitable as paying the overdraft and charging a ridiculous fee. The last thing anyone wants is to have their car note or rent check returned. And almost no one wants to move their checking account 'cause it's a pain in the ass. Boom!
Suddenly, these "plain ol' customers" are generating just as much revenue as wealthy or commercial clients.
The thing is, most retail products are nothing (from a bank's balance sheet point of view) but cost center items. Without socking you with fees, they have little or no incentive to provide them.
And because of the regulation limiting what banks can charge for their merchant service transactions, they're looking to feed on something else.