Home > Personal Finance > Everybody’s Fighting Over Bank Fees

Comments 0 Comments

The fight over bank fees and fairness continues, as President Obama, leading banking industry figures and a diverse group of Wall Street protesters continue to debate bank profits and how the industry should be regulated.

Obama moved the debate forward in a press conference Thursday night, clarifying his previous statements about Bank of America’s new $5 monthly fee for debit card purchases while ratcheting up his critique of the financial industry. In a previous interview with ABC News, Obama seemed to suggest that Bank of America’s fee should be regulated by the Consumer Financial Protection Bureau.

[Related article: Obama Blasts BofA’s New $5 Fee]

“I absolutely do not think that,” Obama said during the press conference. “I was trying to make a broader point, which is that people have been using financial regulation as an excuse to charge consumers more.”

But the president did not walk away from his broader critique of the banking industry, defending his push for tougher regulation.

“(O)ne of the biggest problems about the collapse of Lehman and the subsequent financial crisis and the whole subprime lending fiasco is that a lot of that stuff wasn’t necessarily illegal, it was just immoral or inappropriate or reckless,” he said. “That’s exactly why we needed to pass Dodd-Frank, to prohibit some of these practices.”

Meanwhile, banking industry leaders stepped out to defend themselves. Days after Bank of America introduced its debit card fee, Citibank announced it will begin charging fees up to $20 a month for customers with less than $15,000 in all their Citi accounts. Currently the bank charges $15 a month, and the minimum requirement is $6,000.

[Featured Product: Need a loan?]

Nessa Feddis, vice president of the American Bankers Association, defended the decision, telling CNN Money that charging people money for their accounts is much like any other business that provides a service in exchange for a fee.

“We don’t expect to pay nothing to ride the train,” she said. “It’s the same thing with a checking account.”

And Brian Moynihan, CEO of Bank of America, defended his decision to charge the bank’s customers $5 a month to make purchases with their debit cards, according to CNBC’s Larry Kudlow. “I have an inherent duty as a CEO of a publicly held company to get a return for my shareholders,” Moynihan said.

Speaking at the same event, organized by The Atlantic magazine, Vice President Joe Biden said that Bank of America’s $5 fee is one of the things motivating people to join the Occupy Wall Street protests.

“At a minimum, they are incredibly tone deaf,” Biden said of Bank of America’s decision. “At a minimum. At a maximum, they are not paying their fair share of the bargain here. And middle-class people are getting killed.”

[Resource: Get your free Credit Report Card]

Image: Alex Proimos, via Flickr.com

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team