Bank of America Will Attempt to Impose New Fee

The Wall Street Journal is reporting that Bank of America BAC is considering rolling out a number of new fees, and has begun testing these programs in Arizona, Georgia and Massachusetts. The bank plans to begin charging a monthly fee of $6-9 for the privilege of having a checking account. Customers may be able to dodge these fees by maintaining a certain monthly balance or by purchasing various products from the bank. These fees may go as high as $25. Last year, the company announced that it would begin charging a $5 fee for the ability to have a debit card. The company later cancelled that plan when outrage led to tremendous consumer backlash. Why is management attempting to raise fees so quickly after last year's failure? With the US economy showing slight signs of improvement—including recent better-than-expected employment figures and rising consumer confidence—Bank of America may believe that it will have an easier time putting these fees in place. Yet, perhaps the bank is simply trying to increase its profitability. Recently, JP Morgan JPM at its investor conference stated that customers with less than $100,000 on account with the bank are not profitable. If this holds true for Bank of America, it may not care to lose low balance customers. If they are not bringing in money, what harm is there in seeing them leave? The new fees could make shares of the bank more attractive to investors, although it could generate negative press for the company. Shares are currently trading near $8.20—a significant run-up from the $5 price shares were trading at last year.