Deja Vu? Bank of America Plans Fee Changes

No-strings-attached free checking could be a thing of the past.

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Consumers already feeling nickel-and-dimed by big banks might have to pony up more of their hard-earned money for checking account fees.

Bank of America, the nation's second-largest bank with more than 55 million customers, is planning to tack on a monthly fee for basic checking account users unless they agree to bank online, buy more products, or maintain certain balances, the Wall Street Journal reported Thursday.

Sound a little familiar? It should. Bank of America took a beating last fall after announcing plans to impose a $5-a-month debit card fee, which caused a more than 20 percent spike in account closings. The proposal was promptly reversed, but the bad taste in many customers' mouths has remained.

Still, plans to raise or levy new fees on the bank's checking accounts are anything but new, says Bank of America spokeswoman Anne Pace. The bank has been experimenting with fee-based accounts for more than a year now in Arizona, Georgia, and Massachusetts, where customers pay $6 to $9 a month for an "Essentials" account.

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"We've been testing these solutions for over a year now," Pace says, adding that customer feedback about the new programs has been overwhelmingly positive. "There's really nothing new here." There's still no word on when the fee-based programs will be rolled out in the rest of the country, she says.

Bank of America's free checking options aren't going away though, Pace emphasizes, but there will be qualifiers. "There are ways you can get to free, if you will," Pace says. "There's no fee if you do your basic banking online or via the ATM."

"Essentially this will be the foundation for our offerings moving forward," Pace adds.

But while Bank of America is billing the new fee scheme as a way to tailor accounts to customers' specific banking needs, critics say the move is all about the money. After all, Bank of America's 2011 revenue dipped by more than $26 billion from its take in 2009, the Journal reported, arguably upping the pressure to bridge the loss.

"The problem is that big banks have to find ways to pay for the two "B's": branches and bonuses," says Dan O'Malley, founder and CEO of PerkStreet Financial. "They're both really costly, and they increasingly have to look at consumer fees to fund those two things."

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Another element in that equation involves the consumer banking sector as a whole. "Both Chase and Bank of America have publicly said that they want to focus on up markets and abandon the mass markets," O'Malley says. "They're trying to push out the typical average American from the bank and focus on the wealthy instead because they don't make as much money off of the average American."

The bad news is this is just the beginning of changes to how banks manage their checking account offerings. "This isn't probably the end," O'Malley says. "There will be probably a hundred that will be making these changes over the next few years."

But if consumers' reaction is anything like what Bank of America saw last fall, banks had better bear down. "Americans are getting the picture," O'Malley says. "There was a huge uproar the last time they tried to raise fees, and we expect the same thing this time."

Twitter: @mmhandley