Bank of America, which does business with half the households in America, announced a dramatic shift Tuesday in how it does business with customers. One key change: Free checking, a mainstay of American banking in recent years, will be nearly unheard of.
"I've seen more regulation in last 30 months than in last 30 years," said Robert Hammer, CEO of RK Hammer, a bank advisory firm. "The bottom line for banks is shifting enormously, swiftly and deeply, and they're not going to sit by twiddling their thumbs. They're going to change."
In the last year, lawmakers in Washington have passed a range of new laws aimed at protecting bank customers from harsh fees, like the $35 charged to some Bank of America customers who overdrafted their account by buying something small like a Starbucks latte.
So, in order to keep latte-sipping elites who can't manage to balance a checkbook from paying extra charges, we all will.
Regulation may improve the service we get from this or that regulated entity, but it ultimately does so only by increasing our cost. Shouldn't we be free to choose between a high-service but expensive model and a low-service but cheap one?
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