Category Archives: Bank of America

Bank of America Cancel Debit Charge

The people were heard. Bank of America has announce that they will follow Wells Fargo and Chase Bank and not charge their customers a $5.00 fee a month to use their debit card. After months of bad press and threats from customers that they would move their accounts to other banks, including smaller local banks, Bank of America decided to reverse its course.

It will be interesting to see the affects of the original announcement will have on the Bank. How many customers did move their money and how will continue to do so because of the bad taste left in their mouths.

Debit card charges

In a reversal of policy, Chase and Wells Fargo announced that they will not charge their customers for using their debit cards. The retail banking arm of JP Morgan Chase will stop charging customers a $3 a month fee for using debit cards. Chase which operates in 23 states along with Wells Fargo & Co. which operates largely in the Western parts of the United States has also decided to terminate their planned charged as well.

Now only Bank of America which continues with their plan to charge their customers $5/month to use their debit card and the plan is catching a lot of heat.

BofA Settles Overdraft fee case

Bank of America has agreed to pay $410 million dollars to settle a federal lawsuit alleging the company charged excessive overdraft fees against it customers. The law suit was a combination of several lawsuits filed in 14 different states, all consolidated into one federal case in Florida. Other banks involved in the suit were Wells Fargo and Citibank.

Consumers alleged the bank processed the payments in a way that caused more overdrafts.

Customers pay overdraft fees when they spend more money than remains in their accounts. The fees can reach $35 apiece. Before federal law changed this summer, banks frequently charged overdraft fees on numerous transactions in a single day.

Testing Fee Choices

According to the AP, Bank of America is going to run a pilot program in three states that will allow its customer menu of checking accounts with a variety of fee options. The testing will be done in Georgia, Massachusetts and Arizona. The test includes ways to avoid fees by linking multiple accounts, credit cards and even investment accounts with its Merrill Lynch unit.

The aim is to make fees clearer for customers, while encouraging them to bring more of their financial activity under the Bank of America umbrella.

Bank of America Loan Fraud

The state of Arizona is alleging that Bank of America Corp. violated consumer fraud law by misleading consumers trying to get home loan modifications.

The bank also violated the terms of a 2009 consent agreement it signed requiring the bank’s Countrywide mortgage subsidiary to implement a loan modification program, According to the Attorney General office.

Hundreds of homeowners kept making their mortgage payments because Bank of America repeatedly assured them their loan was being modified. Instead, many lost their homes anyway, according to the Attorney General.

Bank of American Delay Foreclosure

Bank of America is delaying foreclosures in 23 states as it examines whether it rushed the foreclosure process for thousands of homeowners without reading the documents. The move adds the nation’s largest bank to a growing list of mortgage companies whose employees signed documents in foreclosure cases without verifying the information in them.

Bank of America isn’t able to estimate how many homeowners’ cases will be affected, Dan Frahm, a spokesman for the Charlotte, N.C.-based bank, said Friday. He said the bank plans to resubmit corrected documents within several weeks.

The document problems could cause thousands of homeowners to contest foreclosures that are in the works or have been completed. If the problems turn up at other lenders, a foreclosure crisis that’s already likely to drag on for several more years could persist even longer. Analysts caution that most homeowners facing foreclosure are still likely to lose their homes.

This is becoming a problem that many Attorney General will have to look into and put pressure on many banks to comply with foreclosure laws.

Small Bank Appeal

While big banks like Bank of America, Wells Fargo, Citibank and others continue to attract more deposit in the fourth quarter, many American are suddenly moving their money to smaller banks out of principal.

General public anger over taxpayer bailouts and big bonuses is one reason. The other is that according to recent survey, the big banks are also becoming the least trust worthy banks. There’s also growing resentment about how many big banks are nickel-and-diming customers in tough economic times. Others were lured away by more attractive rates offered at local banks or credit union that the big boys could not match.

Untrustyworthy Banks

According to a New York Times article, the least trustworthy banks are, in the order of first to last:

Bank of America, Chase, Capital One, TD/Commerce, Fifth Third, Citibank, and in last place, HSBC.

The survey ranked 50 financial institutions in the United States by the percentage of each firm’s customers who agree with the statement: “My financial provider does what’s best for me, not just its own bottom line.” The results are based on a survey of about 4,500 consumers.

Among Bank of America customers, 33 percent agreed with the statement above, while 31 percent of Chase customers agreed, 29 percent of Capital One customers agreed, 28 percent of TD/Commerce Bank customers agreed, 27 percent of Fifth Third Bank customers agreed and 26 percent of Citibank customers agreed.

Among HSBC customers, only 16 percent said they agreed with the statement, the lowest customer advocacy score ever reported in the United States, down 10 percentage points from HSBC’s score last year and in line with other recent similar poor rankings of other HSBC units.

Wells Fargo/Wachovia, by contrast, did better than the other big banks. About 40 percent of its customers said they believed the bank does what is best for them, with Wachovia’s customers probably pulling up Wells Fargo’s ratings, Mr. Doyle said. Wachovia has generally done substantially better in the rankings than the other big banks.

Credit unions ranked much higher than the big banks, as they have in previous years, with 70 percent of credit union customers saying their financial institution puts their interests first.

Insurance firms, meanwhile, remained the highest rated firms for customer advocacy, with more than half of all customers rating their insurers high on customer advocacy and insurers representing two-thirds of the firms in the top half of the rankings. The ranking of investment firms, meanwhile, fell below banks for the first time since the rankings began. Investment firm rankings tend to fall when the market isn’t doing well, Mr. Doyle said.

Bank of America – New CEO

The new CEO of Bank of America, Brian Moynihan began his first day on the job today. In his speech to shareholders, he announced that Bank of America was continuing to recover from the financial crisis but will remain cautious even as it expects to grow in 2010.

Moynihan takes over at time when the bank faces continued loan losses in the billions of dollars. It lost more than $2.2 billion in the third quarter as bad debt kept rising with consumers still struggling to pay their bills. Investors will hear if there’s been any improvement when the bank reports its fourth-quarter earnings on Jan. 20.

While credit delinquencies remain at historic highs, Moynihan said that the losses “do appear to be stabilizing.”

Bank of America has about 53 million relationships with customers, including individual consumers and businesses. That breadth helps make BofA particularly vulnerable to high unemployment.

Moynihan told the bankers that the economy has bottomed and that the bank is forecasting global growth of more than 4 percent in 2010. Growth in U.S. gross domestic product will be above 3 percent, he said.

“It’s just great to be in the year 2010,” Moynihan said. “Actually, it is great to be anywhere other than where we were as a company a year ago.”