Brian Moynihan Has Had About Enough and is Fighting Back!!

[BargainValueHunter]

Gotta say...I like his style!  8)

 

http://www.bloomberg.com/news/2011-10-26/-incensed-moynihan-fights-bofa-critics-with-main-street-appeal.html

 

“I, like you, get a little incensed when you think about how much good all of you do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well,” Moynihan said during the Oct. 18 gathering. To the bank’s critics, he said, “You ought to think a little about that before you start yelling at us.”

[libor.plus1]

“I, like you, get a little incensed when you think about how much good all of you do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well,” Moynihan said during the Oct. 18 gathering. To the bank’s critics, he said, “You ought to think a little about that before you start yelling at us.”

 

Ya... and the taxpayers get a little incensed when they have to bail your ass out so you can charge them $5 a month.

 

And now 'serving clients and customers' is a privilege? YOU'RE A BANK, THAT'S YOUR JOB.

 

 

[cwericb]

Good post libor

[Kraven]

I don't understand the outrage over the charge.  Switch banks if you don't like it.  For some reason I don't hear people get pissy about being charged for floormats when they buy a Chevy.

[tombgrt]

Yes. I doubt BAC will lose more value from costumers leaving than it will gain from the charge. Most don't care and those that do are generally to lazy to actually cancel their account(s). Also, I'm guessing that most people that do leave will generally have accounts of lower value because much of those will be unused accounts or with low balances. Who knows, maybe it's a good strategy to clean up and have a healthier customer base.

[Grenville]

There was a nice tidbit I on the Q3 CC regarding the fee. Basically they are trying to cover cost from customers who don't have a meaningful relationship with BAC in terms of accounts or assets with the banks. They also laid out a number of ways customers can avoid the fees: direct deposit, significant level of savings with the bank or other relationships like mortgages.

 

They don't mind losing the business of those that incur the fees because the business is not a net positive for the  bank. This is what was said on the call, I'm not a customer of BAC so I can't speak to actually knowing how one avoids the fees.

[JSArbitrage]

I don't understand the outrage over the charge.  Switch banks if you don't like it.  For some reason I don't hear people get pissy about being charged for floormats when they buy a Chevy.

 

I think the outrage comes from the history of the business model.  Remember, for most of the era of banking, the bank would PAY you for the right to hold your money.  But now that banking is effectively an oligopoly that's propped up by the government, they are CHARGING you for the right to hold your money.  800,000 people left Netflix for less.

 

I think it was a very stupid business decision myself.  If BoA had maintained completely free checking while the other majors started charging, they could have started rebuilding their relationship with customers.  A good marketing agency would have had a field day on this.  For a bank the size of BoA, the cost to hold these "marginal" accounts is not very much at all.

 

Banking is turning into Coke versus Pepsi: a market based on pseudo-collusion. 

[txlaw]

Moynihan was talking to his employees.  Clearly, he is trying to address the negative energy that a lot of them are getting from the press, politicians, and other interest groups.  It's a pep talk -- he's doing the right thing.

 

Regarding the $5 fee, it's probably a good thing for BAC shareholders to drive off unprofitable accounts.  The PR was bad at first, but you might as well take additional heat at a profit since you're the whipping boy of American finance in any case.  The beauty of the BAC franchise is that the account closings that will result from the move don't mean much in the scheme of things.  (That is if you believe that BAC's deposit franchise, along with WFC's, is truly the best in the country.)

[rjstc]

I don't understand the outrage over the charge.  Switch banks if you don't like it.  For some reason I don't hear people get pissy about being charged for floormats when they buy a Chevy.

 

I think the outrage comes from the history of the business model.  Remember, for most of the era of banking, the bank would PAY you for the right to hold your money.  But now that banking is effectively an oligopoly that's propped up by the government, they are CHARGING you for the right to hold your money.  800,000 people left Netflix for less.

 

I think it was a very stupid business decision myself.  If BoA had maintained completely free checking while the other majors started charging, they could have started rebuilding their relationship with customers.  A good marketing agency would have had a field day on this.  For a bank the size of BoA, the cost to hold these "marginal" accounts is not very much at all.

 

Banking is turning into Coke versus Pepsi: a market based on pseudo-collusion.

 

Wells Fargo started doing this roughly 20 years ago and it worked for them. Starting to run it more business like instead of trying to be everything to everybody (Like the government) is what they should be doing. For the small marginal accounts there are plenty of alternative choices for their accounts ie; small local banks and credit unions.

[Myth465]

The charge is good for consumers and good for the banks. Also good for transparency. In banking the poor subsidized the rich account holders via overdraft and other fees. Now its been cleaned up a bit and if the overdraft and debit card fees are to be reduced charges should come in to replace them. Also the big banks probably dont want account holders who have less than $1000, dont direct deposit, dont overdraft, and dont add any value to the bottom line.

 

I have 3 accounts and will be reducing it to 2. One account has $50 in it and adds no value to me and no value to the bank really. If people are too lazy, stupid, or whatever to change banks then shouldnt they just pay the $5. I mean there are literally 100 banks between online and branch available to every US citizen. Some even rebate ATM fees and have other perks.

 

The big banks get smaller, community banks pickup the slack, and things get more transparent. Whats not to like?

[JSArbitrage]

I don't understand the outrage over the charge.  Switch banks if you don't like it.  For some reason I don't hear people get pissy about being charged for floormats when they buy a Chevy.

 

I think the outrage comes from the history of the business model.  Remember, for most of the era of banking, the bank would PAY you for the right to hold your money.  But now that banking is effectively an oligopoly that's propped up by the government, they are CHARGING you for the right to hold your money.  800,000 people left Netflix for less.

 

I think it was a very stupid business decision myself.  If BoA had maintained completely free checking while the other majors started charging, they could have started rebuilding their relationship with customers.  A good marketing agency would have had a field day on this.  For a bank the size of BoA, the cost to hold these "marginal" accounts is not very much at all.

 

Banking is turning into Coke versus Pepsi: a market based on pseudo-collusion.

 

Wells Fargo started doing this roughly 20 years ago and it worked for them. Starting to run it more business like instead of trying to be everything to everybody (Like the government) is what they should be doing. For the small marginal accounts there are plenty of alternative choices for their accounts ie; small local banks and credit unions.

 

I am not saying it won't work; I am just responding to the poster that wondered why people were outraged.  I think my point stands in that regard.

 

As far as how it will effect BAC, I agree it won't.  BAC is a government-backed player in a ologopolistic market.  Their position is pretty darn solid regardless of the little tweaks here and there. 

 

I don't think these deposit holders will run to local banks or credit unions as much as I think they will simply exist under-banked by using pawn shops, payday lenders and check cashing places.

[Santayana]

In related news PG&E is cancelling the accounts of all their customers that have bills below $50/month.  "They're just not very profitable", sources said.

[alertmeipp]

“I, like you, get a little incensed when you think about how much good all of you do, whether it’s volunteer hours, charitable giving we do, serving clients and customers well,” Moynihan said during the Oct. 18 gathering. To the bank’s critics, he said, “You ought to think a little about that before you start yelling at us.”

 

Ya... and the taxpayers get a little incensed when they have to bail your ass out so you can charge them $5 a month.

 

And now 'serving clients and customers' is a privilege? YOU'RE A BANK, THAT'S YOUR JOB.

 

U know... Some of this mess is caused by the government housing program with FNM/FRE and those who buy a house without job, etc...... most of BAC's problems now is because it bought CFC. I feel bad for BAC's long time shareholders

[Grenville]

You guys will get a kick out of this. I don't really understand the mechanics of why but Redbox is using debit fees to explain away their price increase!

 

"Redbox is making an announcement about its prices today, and we want to make sure that you hear it from us first.

 

Starting on Monday, October 31, the daily rental charge for DVDs will change to $1.20 a day.* The price change is due to rising operating expenses, including new increases in debit card fees. Daily rental charges for Blu-ray™ Discs and video games won't change.** Additional-day charges for DVDs rented before 10/31 won't be affected, either.

 

In order to make the transition easier, Redbox will discount the first day of all online DVD rentals to $1.00 from 10/31 through 11/30. Additional rental days will be $1.20.***

 

If you have any questions, please visit redbox.com/pricechange. There, we've provided additional information.

 

This marks our first price change in more than eight years as we work hard to keep prices low for our customers. "

[tombgrt]

http://www.reuters.com/article/2011/10/28/us-bankofamerica-debit-idUSTRE79R5H820111028

 

 

Truly a storm in a glass of water.