Bye-Bye, Bank of America

As I was waiting for the very nice bank teller to give me my bank check for the balance in my account, the woman next to me was trying to tell her very nice teller that she did not want overdraft protection on her account. She was told she would have to wait fifteen minutes to talk to a “personal banker” to remove it. Weren’t big banks supposed to be more efficient?

My nice “personal banker” made the mistake of asking me why I was closing my account. So I told him:

  • One of my local banks refunds my ATM fees at other banks.
  • My other local bank pays 0.75% interest–on an ordinary checking account.
  • Bank of America breaks the law.
  • Bank of America closed two out of the three branches in my town.
  • Oh, and it’s too big, and presents a systemic risk to the U.S. economy.

Behind him was a sign encouraging people to use their debit cards to pay for purchases to take advantage of a “savings” program that moves what is already your own money from your checking account to your savings account.

Afterward I went out for a martini even though it was just before noon. Yes, changing your bank account is a hassle. But the satisfaction is worth it.

By James Kwak

55 thoughts on “Bye-Bye, Bank of America”

  1. Good on you. I’ve long felt that if I need to count my fingers after shaking hands with a business representative, it’s time to do business elsewhere.

    This rule, alas, cannot be applied to cell phone companies, for which the rule is, “You’re screwed anyway, get the best deal you can.”

  4. To add to the asinine “efficiency” of BofA being TBTF:

    I’ve recently refinanced my mortgage with them, but it requires me to send my payments to a different sub-entity of BofA (Bank of America N.A., instead of BAC Services). However, this new entity does not allow automated mortgage payments unless you have a BofA checking account which I have no need to open.

    Now, I’m reduced to getting monthly email reminders and going through the manual process of scheduling a payment online from my real account every month… because they also refuse to allow you to schedule more than one payment or more than 30 days in advance.

    Why do we need these companies again? TBTF? Too Big To Exist!

  5. James, I closed one of my two accounts at Chase to do the same kind of rollover. I was also asked why I was closing the account
    –too big to fail
    –Jamie Dimon’s lies
    –lack of loan modifications
    –predatory lending
    –and the last straw (http://wp.me/poWUd-b9)

    The guy tried -talked about the 300,000 loan mods, wanted to know the branch, whether I knew folks who had load mods denied.

    The funny moment was when he asked if I wanted the account’s money put into the other checking acct – dude, I’m getting my money out – so I politely asked for the cashier’s check!

  6. I’ve used credit unions for years. My credit unions refund my ATM fees and pay me 2.5-3% interest on my checking accounts. Banks are for chumps.

  8. Write them a check. It’s almost as fast as the automation, more secure, and trouble-free. Besides, it makes them spend money on processing paper.

  9. James, I love the blog; it’s really come into its own over the last few months.

    What would be the features of your ideal retail bank? I’m not just talking about the traditional role but what it could be: mobile payments, analytics, community involvement, saver directed lending, saving recommendations – the whole shebang.

  11. I’m still mad that BoA ended up with my mortgage after it was passed around thru 3 other bankrupt Mortgage servicing companies. I wish I could have refused them buying it up somehow and taken it to a better bank.

  13. Looking at the headline I was hoping to read about an imminent BofA failure. Oh well…

  17. James, your “nice ‘personal banker'” didn’t make a mistake. One of his jobs is to ask customers why they are closing accounts. Maybe the bank has a better product. Maybe there was an error that can be fixed. This is sales 101 and your “personal banker’s” job one is to sell product.

    I’m glad that you rationally evaluated competing products and chose the one that’s best for you. It’s interesting that you get so much satisfaction from the largely symbolic action of closing your account.

  19. Imagine the scene:

    Applause……………… Applause……………… Applause……….. Kwak feels awkward and tries to motion the crowd to sit down………… more Applause……. finally the crowd quiets, and Mr. Kwak quotes from Whitman:
    “Have you learned the lessons only of those who admired you, and were tender with you, and stood aside for you? Have you not learned great lessons from those who braced themselves against you, and disputed passage with you?”

  20. Would you answer a (maybe) stupid question?

    I do not understand “this new entity does not allow automated mortgage payments”. How does that work generally and why doesn´t it work here?

    Here in Germany you have 2 different kinds of “automated money transfers” from your bank account.

    1. You tell your bank to transfer – say – each month on a specified day x Euros from your account to account xyz. Your rent for example. Or a mortgage payment. Nobody would dream of disallowing it because it´s the easiest cheapest way.

    2. You can allow a service company (telephone for example) to automatically withdraw the amount of last months bill. Useful if the amount varies a bit each month.
    (I get my telephone bill for last month usually around the 15th next month. A week later they initiate the money transfer.)

    In both cases it just takes a short visit to the bank to change or disallow further transfers.
    And you have 6 weeks after each and any money transfer from your account to go to your bank and ask for a transfer back. Without giving any reasons and the bank has to do it. Part of the consumer protection laws here.

    So I just don´t see the problem?
    Customers (and companies) here in Germany love automated payments. It´s easy, cheap and pretty safe.

  21. Hey James,
    I have a rhetorical question for you: “personal banker”—is that like the hypocrite, loser, rat they have working at some places called “employee advocate”???

  22. I don’t consider it symbolic at all. Why actively participate with an institution that is dangerous to society? We can’t avoid the taxpayer hit, but we can at least avoid the fees and allowing our money to be put toward these practices counts for something. Sure, it’ll take a lot of folks doing this to make fundamental change, but at least we can start!

  23. I don’t see the problem either, thus my consternation! As best as I can determine from the speaking with loan officers and from the documents on BofA’s website, it simply appears to be a very, VERY poor business decision on the part of this particular branch of BofA which now controls my loan servicing.

    I’ve never even heard of such restrictions anywhere else! I refuse to open a checking account at BofA just to allow automatic withdrawals for my mortgage payments….

  24. I too have no love for Bank of America. I mistakenly set up a duplicate payment of a credit card bill and when I inquired as to whether they could reverse the duplicate payment, they said that they’d be happy to but it would take 15 to 30 days. Wow, you can take my money in 24 hours but can’t give it back for 30 days?

  25. This post made my evening. I plan to follow your example with my account at Chase (originally a WAMU account), since they recently tried to charge me $72 to access printed copies of statements I was promised would be available online for seven years. Small and local, here I come! Congratulations, James!

  26. Six months ending June 30, 2009, total revenue net of interest expense: $68.5 billion. Market cap: $114.2 billion.

    Tilt on!

  27. Never had the pleasure.

    Wikipedia’s definition of an abusive relationship requires a mighty stretch to fit a bank.

    “An abusive relationship is an interpersonal relationship characterized by the use or threat of physical or psychological abuse (see battered woman syndrome). Abusive relationships are often characterized by jealousy, emotional withholding, lack of intimacy, infidelity, sexual coercion, verbal abuse, broken promises, physical violence, control games and power plays.”
    http://en.wikipedia.org/wiki/Abusive_relationship

  29. That’s the new designation for the people who sit in offices or cubicles (and open accounts for people) as opposed to the tellers behind the window. A long time ago I thought “personal banker” meant “banker for rich people,” but apparently no longer.

  32. That would be the “Private Banker” who sits in the cubicle 1 foot wider and 2 feet longer…..

  33. Classic…..Kind of like sending the junk mail post paid reply envelopes back empty….

    That’s beautiful. Yep, I’ll take the whole schebang. Everything. Checking, savings, debit, credit, overdraft protection, ready reserve, opt me in to the fees….the whole enchilada….

    Next day, I changed my mind….

  34. There is no problem. It is this way by design.

    Why would they possibly want to make it easy for you and allow you to set up an automatic electronic payment that would automatically operate like clockwork seamlessly in perpetuity?

    WHAT ABOUT THE FEES?????!!!!!?????

    There MUST BE FEES!!!!

    See, by not allowing you to set up a scheduled automatic payment that operates automatically and seamlessly in perpetuity, the bean counters have figured out that $XXX worth of FEES are generated by people inadvertantly forgetting to endure the monthly hassle of making one time payments in perpetuity. This leads to LATE PAYMENT FEES. Which leads to UNIVERSAL DEFAULT and increased credit card interest rates. Which also leads to reductions in credit limits to just above your balance, and a doubling or tripling of your minimum monthly payment. Which in turn leads to OVER LIMIT FEES. Once all the oligarchs get in on the action, this ultimately leads to LATE PAYMENT FEES. Which then of course result in credit rating damage, which leads to universal default, then increased interest rates, reduced credit limits, increased minimum payments, and most importantly….FEES…AND FEES…AND MORE FEES….

    Or, they will allow you to set up an automatic payment (thus they in fact do have the technology) IF, and this is an important IF…IF you open a BofA checking account. Which of course will come with the convenience of deposits clearing in 487 days…and FEES. And, if all you use the account for is the automatic motgage payment, invaraibly INACTIVITY FEES.

    It’s all about the FEES. It would be comic, if not so tragic.

  35. Thanks for the link James and Simon, it means a great deal (personally) to me. I know I will fall way short, but I will try to follow Baselinescenario’s excellent example as a place which provides information which is beneficial to the public-at-large.

  36. Ugh, B of A are the worst! The ‘keep the change’ “savings account” is an utter scam as it COSTS $6 per month just to maintain it. So all the money your supposedly ‘saving’ is just being fed to B of A as fees. Outrageous. Unreal how that is considered to be a legal practice.

  37. Congratulations. I fear its all for naught. They don’t need our stinking deposits do they? They have the ultimate deposit of fed. reserve guarantees. Therefore, deposits (capital) isn’t required, they don’t have to M2M or pay their customers interest on savings. Fees paid to them by the US govt to operate are more rewarding.

    I’ve found recent TV ads from them totally INSULTING. Same with Citi and any national/international bank.

    Restore Glass-Steagall and repeal the CFMA. grrrrrr.

  38. Bank of America thinks that it is an unneccesary expense to employ those very nice tellers. A couple of years ago I spent some time (as a contract, not a BOA employee) demonstrating the touch screen ATMs to the customers. BOA would much rather you use the machines so it can get rid of more tellers. At least this is what the branch management told me. The lack of service was one reason why I closed out my BOA account.

  40. Bank of America has nothing on Wells Fargo … a supremely crooked enterprise. I was on a one-man crusade against these thieves several years ago when the Fed started raising interest rates aggressively around 2004. Every time the Fed hiked, like twice a quarter, rather than raise the interest rate return in money market savings accounts, Wells Fargo would create a “new” money market product with the higher interest rate that you had to specifically ask to be switched to in order to get the higher rate, even if your balance qualified for the higher rate in your current money market account. This way they could entice new customers with the higher rates while screwing every other customer out of the higher rate…unless you were aware of what they were doing as I was or some kindly teller was nice enough to tip you off about it. Of course, even the new customers would be screwed once the Fed raised rates again because Wells Fargo would just create another so-called new product.

    Naturally, there was nothing new about the products. When you switched over nothing changed, not your account number, nothing… except the interest rate. They basically just gave the same product new names. They literally created like eight to ten “new” money market products each year when rates were going up to avoid automatically giving customers who qualified the higher rate.

    I finally got so disgusted from having to go to the bank and change products every few months that I made my personal banker get on the phone to corporate (there’s no way to contact these people otherwise, it’s very guarded contact info.) and get them to admit that I should be getting the higher rate without changing products. They claimed it was a computer glitch. Well I guess the “glitch” conflicted with the standard corporate policy every Wells Fargo banker would tell every customer…that you have to change products to get the higher rate. That’s very convenient for them because it’s illegal for a bank to change you into a different account without your permission…hence the sleazy practice of creating “new” money market products every time rates go up. Funny how they see no need to make you switch accounts when rates are going down. Anyway, they continued to screw me over and needless to say, I eventually withdrew my very sizable deposits from WF and took them elsewhere.

    Mark my word, if rates start going up again, and they certainly will eventually, I’m confident these sleaze bags will start the practice all over again. I’d love to see someone expose these clowns for ripping off deposit holders to the tune of millions each day. Sad thing is, there’s technically nothing illegal about it. But that doesn’t mean someone can’t expose them for questionable business practices. I’ve never known another bank to conduct themselves in this manner.

  41. Going to close my BOA checking, savings, and money market accounts today. I opened accounts at my local credit union that has a) better interest rates b) an online banking website that is light years ahead of Bank of America’s c) allows me to withdraw fund from any credit union ATM anywhere in the country without a fee.

    I know the poor grunt customer service rep will ask me why I’m closing my account. I feel bad for these people — its not like they’re paid a lot or get to make the big decisions. But here’s my gripe:

    1. Checks between BOA accounts are routed through another federal reserve district. My landlord banks with BOA and even though he deposits my check on the 5th of the month, it doesn’t clear my account until the 10th-15th. The local branch advised me that they send all their checks off to a central processing center and there is nothing they an do about it. I’m in Washington and the local branch told me they send all of their deposits (from the night drop) off to Arizona for processing. How and why the local branch can’t process their own night drop deposits like they would if you were in person is beyond me.

    2. No overdraft protection from my savings account. BOA refuses to allow me to use my savings account as overdraft protection. They force me to use my credit card. I never overdraw my account but as a consumer, I should have the choice. Its my money and if I make a mistake balancing my account, they have more than enough of my money in another savings account to cover the overdraft.

    3. Marketing – they just installed new ATMs in my area. When you enter your PIN, it ‘validates’ your pin for about 20 seconds as you’re standing outside in the cold. During those 20 seconds, they push whatever latest and greatest financial product off on you. The PIN is encoded in the card. There is no need to ‘validate’ anything on it. They are just using the opportunity to market products to me.

    I know I’m a small consumer with no clout and no giant sums of money in the bank. But I have friends, landlords, and family that respect my opinion and they have gripes of their own. Its time the consumer woke up, paid attention, and started doing business somewhere else. My sister is about to close her Citibank account. My landlord is moving all his business accounts out of BOA. My brother is even closing his Wells Fargo accounts. Kill the beast(s)!

  43. James, a wonderful account…of proactive change. I applaud you because the hassle of changing accounts cannot be minimized.

    BTW, have you noticed the New BofA saturation ad campaign on the PBS Newshour, NPR and other outlets?
    Shaping a new image…with the same old policies.

    Austin, Texas

  44. The PIN is encoded in the card.

    Nope, it’s not. If the PIN were on the card, fraud would have ended the use of PIN transactions. Massive fraud too.

    The transaction that checks the PIN is elaborate and from the outside pretty secure and complete in at most 5 seconds. The rest of the time is just showing you promotions.

    The bad news here is those promotions work. People are conditioned to wait for adverts. They wouldn’t have them if they didn’t boost revenue.

  45. It’s an excellent theory, but a small bank was the first I encountered that required a binding arbitration agreement as a condition of doing business. I just had a response to my formal complaint stating that there is no law against this, and therefore nothing the Federal Reserve can do, and “Its [the bank’s] rationale was that such agreements are necessary for the Bank’s protection and, after checking with other banks in the area, it learned that many large and community banks have adopted such agreements.”

    Call it an early warning, and start hounding Congress now.

  46. The thought of going to the United States pushes me over the edge so I dread it. I have to do it. Bank of America has cheated me consistently and uniformly in a method that has to be approved at the top of the bank.

    I worked as a temp settling foreign accounts in a major bank in the 1990s. The agreed settle exchange amount was simply entered, checked that it was correctly reported in the start of the daily activity report. Then everyone got the same amount.

    Bank of America embezzled $175 from my debit account on a phony foreign exchange report. This had to be done by hand.

    Monthly I get $2 fees for this or that, that when I call get reversed. Yeah, I don’t live in the US, and yeah, it pisses me off that I have to pay $5 to $10 in phone charges to get an illegal charge taken off my account. I worked phone banks for customer complaints in the 1990s, the only time that you have customer wait time is when it is company policy that you do not get an instant, “hello how may I help you?”

    I obviously have internet. Ask Bank of America to do a correction and then go buy toner so you can print out a 5 page form, with documentation.

    I’ll have to come. I hate the idea, but I am going to have a stroke dealing with these crooks.

    Then my wife proudly informs me today that she just opened a Bank of America account so we could deal with the same bank. I appreciate the thought, but I’ll have to be drugged out of my mind before I tell her we’re closing any american accounts, period.

  49. By that logic: write them several paper checks, equal to the amount owed when taken together.

  51. I am so with you on that. It just burns me up when banks do that. It would certainly be nice if consumers had more ‘say-so’ in the process when banks/mortgage companies do that(But, unfortunately- it’s all perfectly legal).
    I mean, seriously- If I had WANTED a mortgage through Chase, I would have GONE to Chase in the first place. Right?

  52. Google the movie “The Secret of Oz”

    Learn about the history of the system & what has been done in the past. It is eye opening!!!

  53. I wanted to re-fi through the bank my mortgage had been with for 5 years. They wanted 3500 to do the paperwork. I said for just refinancing? You already have all the paperwork done! They said it didn’t matter. So I called up my credit union and asked them how much. 350. Magnitude of 10. So now my mortgage is with the credit union, and the bank lost all that interest. I’m not crying for them.

  54. Just know though that not all credit unions are created equal. Definitely ask questions. We did a re-fi a number of years ago and chose to go through a Credit Union we did business with because our experiences with this particular institution had been generally positive. Now, I will say that they DID get us a better rate than we were paying on our mortgage (I’ll give them that). And maybe (though not sure) we got a slight discount on the re-fi costs, which we just rolled back into the mortgage. HOWEVER, as it turned out, this particular Credit Union did not service the loans they originated. They just guaranteed the interest rate, got you to close, then bundled the loan and put it on the market (that’s how we wound up with Chase). Not quite what I was expecting for going with a credit union.
    Now, in the future, I know what additional questions to ask before making a commitment like that. Live and learn.

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