Bank of America Unveils Fee-Based Accounts as New U.S. Rules Hit Revenue

Bank of America Corp., pressured by U.S. regulations limiting debit-card and overdraft fees, is set to give its retail customers a choice: do more financial transactions through the company, or pay a monthly fee.

The biggest U.S. lender by assets is introducing four new accounts where users pay fees unless they keep minimum balances, make regular deposits, use credit cards or take advantage of online services, said Joe Price, head of the Charlotte, North Carolina-based company’s consumer-banking operations.

Banks including JPMorgan Chase & Co., the second-largest bank by assets, and No. 3-ranked Wells Fargo & Co. are seeking to replace revenue lost from consumer-protection rules by boosting fees. Bank of America, with $633 billion in retail deposits as of September, has said overdraft, credit and debit- card fee limits may squeeze annual revenue by $4 billion starting this year.

“You can pay with cash, or you can pay with behavior,” said Bart Narter, senior banking analyst at Boston-based consulting firm Celent. “They’re restructuring their pricing to deal with the new realities.”

Bank of America starts trials of the four account types this month in Massachusetts, Arizona and Georgia, and expects to move all customers to the accounts starting in 2012, Price said yesterday in a telephone interview. Higher minimum balances can earn rewards like multiple accounts, and discounts on services including money orders and checkbooks. A fifth program for those with $50,000 in combined balances includes concierge services and higher interest rates.

The plans “provides you the choices on how to compensate us,” Price said. “In some cases that means you need to bring us more business because you like all these features, and it costs us more to provide that.”

The trials will test various monthly fees, starting from about $6 to $9, said Anne Pace, a spokeswoman for the bank.

JPMorgan was weighing higher credit-card rates and monthly fees, Chief Executive Officer Jamie Dimon said in July.

“If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger,” Dimon said.

To contact the reporter on this story: Hugh Son in New York at

To contact the editor responsible for this story: Dan Kraut at

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