Smaller Banks in Massachusetts to Lure BofA Clients

October 01 00:00 2011

New York, October 1 ( – Community banks in Massachusetts are trying to take advantage of the indignation of Bank of America’s customers over the proposed imposition of $60 per year fee for use of debit cards by vying to win them over. Joe Bartolotta, a spokesman for Eastern Bank, based in Boston said that Bank of America (NYSE: BAC) “struck the third rail on this one,” and added that “We think it will be an opportunity to attract new customers. People are fed up with fees.”

Large banks like Bank of America are trying to compensate their losses due to the cost of increased regulations, persistently low interest rates, and other charges that have increased their expenditure and reduced profits. Other large banks like Wells Fargo and JPMorgan Chase are market-testing the scheme. Citizens Bank, the second largest bank in Massachusetts, is planning to cut back premiums on the use of debit cards effective November 9.

The large banks that are planning a fee for usage of debit cards, are putting the blame squarely on the provision in the federal Dodd-Frank financial overhaul law that will reduce the amount banks can charge per debit card purchase, to 24 cents from 44 cents. This is likely to cost banks $6.6 billion a year in revenue.

No comments were available from Bank of America officials regarding the move by their competitors to entice their customers.