Bank of America is now charging fees to online-only banking customers who keep low account balances, seemingly punishing people who are poor or low-income.
The second-largest bank in the United States just switched customers using free online-only checking accounts to accounts that come with fees if they don’t keep up their bank accounts. According to The Wall Street Journal, customers will be charged a fee if their daily bank account falls below the minimum $1,500 or if they don’t have a monthly direct deposit of $250 or more.
The online accounts were popular options for freelancers with volatile incomes and for lower-income people. But now, Bank of America will charge you for not having a steady income or for living paycheck to paycheck.
Already, a petition demanding that the bank stop shuttering the online-only accounts has gained over 45,000 signatures.
Looking for revenue in the wrong places
Bank of America set up the online-only accounts back in 2010 to try to encourage more online banking. However, in 2013, it stopped offering that option and in 2015, Bank of America began to migrate the fee-less online-only accounts to accounts with minimum balance requirements.
As the Journal noted, Bank of America is looking to feed its bottom line, and that foray into online accounts ended up being expensive for them.
“Banks have long grappled with how to charge customers for basic checking services,” the Journal reported. “The accounts are costly for banks to maintain, though they do bring in revenue through overdraft and other fees.”
A $3 billion tax cut isn’t trickling down to customers
Donald Trump’s tax reform bill gifted Bank of America and other corporate giants with a tremendous tax cut. The diminished corporate tax rate of 21% (down from 35%) will save Bank of America an estimated $2.7 billion this year.
Even with this a whopping 10-figure addition to its profit margin, Bank of America still finds it necessary to scrounge up further money from its most financially insecure customers-the people who are least likely to be able to afford fees in the first place.
The bank has also been moving away from rural areas and pulling away from more consumer options to focus instead on higher density urban areas.