Everyone hates Bank of America (NYSE:BAC). And with good reason.
The financial stock announced last week it plans to start charging customers $5 per month for the privilege of having a debit card. In this day and age, most folks have at least one debit card for every account — and the Bank of America fee is no small burden on already cash-strapped consumers.
The fee will be rolled out starting early next year. But expect consumers to run screaming much sooner than that.
To be fair, JPMorgan Chase (NYSE:JPM) and Wells Fargo (NYSE:WFC) have been experimenting with $3 monthly debit card fees in certain markets, toying with whether they will become permanent. And in general, there have been fewer rewards and more fees levied on customers in the wake of Dodd-Frank reforms and tighter capital requirements for banks.
But come on, Bank of America. How many reasons do you have to give folks to hate you?
Homeowners Hate BofA: The government is suing the bank (along with 16 others) for its role in the mortgage debacle. It also faces legal battles at the state and civil level over robo-signings, improper foreclosures and other mortgage mayhem. By and large, most homeowners see Bank of America as the perpetrator of the financial crisis and not a victim.
Regulators Hate BofA: Bank of America has sold off many of its assets in a desperate bid to raise enough capital to meet new banking regulations. On top of that, the government is looking into the Merrill Lynch deal once again — a shotgun wedding at the height of the financial crisis that got former CEO Ken Lewis indicted by the SEC on civil charges.
Investors Hate BofA: Sure, there was a brief respite for BAC stock when Warren Buffett bought in with a $5 billion deal for preferred shares. But that nice 6% dividend is not what normal retail investors get from shares. Try a nominal penny per quarter for a measly 0.6% yield in common shares — not even close to palatable for income seekers. With a 50% decline year to date and an 83% drop from its pre-crisis peak in 2008, investors have a good reason to hate this stock.
Employees Hate Bank of America: With planned layoffs courting 30,000, you can bet that a lot of folks at the financial giant aren’t to pleased with the state of their current employer. Meanwhile, CEO Brian Moynihan is due up to $10 million in performance-based cash and bonuses. Fair is fair, right?
Consumers Hate BofA Brand: Bank of America placed 28th out of 30 in a recent American Banker survey of bank reputations. Not an encouraging sign.
Now, thanks to the steep fees, the folks who actually liked Bank of America enough to actually bank there can now hate it, too.