However, that's not true. WalletBlog points out that the bank made no such distinction in their October 6th letter. Here's the relevant excerpt:
"In light of the concerns expressed to us by our customers, Bank of America will not implement any change in terms (risk or economic based) re-pricing of consumer credit card accounts between now and the effective date of the CARD Act."
That language doesn't draw any distinctions between types of re-pricing, so it's kind of weird to retroactively define the term as only relating to interest rates.
But this is a moot point because the letter only promises that they won't practice re-pricing between now and the implementation of the CARD Act. After that goes into effect in February 2010, the promise no longer applies. I don't know why BoA's representative bothered to misrepresent the language of the letter when he could just as easily have pointed out that it was nothing more than a temporary pledge—and mostly an empty once, since they had already re-priced many accounts in the month leading up to the letter.
As far as implementing fees after the CARD Act goes into effect, well, that's where WalletBlog says that BoA may end up in violation of the law. BoA argues that the CARD Act prohibits raising interest rates but says nothing about implementing annual fees, but WalletBlog points out that the language of the CARD Act is ambiguous, and thanks to a 1996 Supreme Court case involving Citibank, the FDIC considers the term "interest" to include:
...among other things, the following fees connected with credit extension or availability: numerical periodic rates, late fees, not sufficient funds (NSF) fees, overlimit fees, annual fees, cash advance fees, and membership fees.
It sounds like BoA may be testing the boundaries of the CARD Act and seeing if it can get away with annual fees by arguing that they're not specifically prohibited.
Be sure to check out WalletBlog's full post on the matter.
"Bank of America Tries but Fails to Defend New Annual Fees" [WalletBlog]
"Bank of America Readies Itself to Break the Law" [WalletBlog]
(Photo: mrkathika)
"Hi, I'd like to opt out of the higher rate"
"Ok, I can go ahead and close the account and allow you to enjoy the existing rate without opting into the higher one"
True story.
]]>this is exactly what all the card issuers told everyone UP FRONT would be done if the Act passed.
this is exactly what has been happening & will continue to happen right up until the Act takes effect.
legal? legal is what the $$ & power say is legal.
surprise? not.
]]>End Sarcasm.
]]>Yes that is sarcasm.
]]>@mbnovik: Who is Tyler Durden?
]]>The immediate response from the bank lobbyists (Yingling at the American Bankers Association) was the familiar comment that regulation would make it harder for banks to do business and would limit the availability of credit. Why is it that any time banks are asked to obey the same laws other industries obey, such as fairness and disclosure, they pull out that fearmongering about limiting the availability of credit. Maybe it's time for the federal government to set up an agency that uses taxpayer funds not to bail out mismanaged banks but to provide some help for taxpayers who are having trouble making ends meet.
]]>I did not see that one coming.
]]>Surely some of those fees are not technically legal.
]]>@menty666:
Why do you care?
]]>@calchip:
What makes you think the fees are illegal? The fact that you don't like them?
]]>ALL of Bank of America's profit last quarter comes from *new* fees -- almost all bogus fees, many of which are probably illegal, and prey on those individuals least able to afford them. But the Fed won't do anything because this large-scale theft is the only thing keeping Bank of America from going into insolvency.
When people en mass revolt, pull their money out of BofA, and/or stop paying their credit cards, the bank will fold and then, hopefully, all of the evil people in upper management will be replaced with better people.
]]>We just received a new B of A card (they took over MBNA operations some time ago). We haven't used it yet and if they impose any fee at all I'll simply return the card.
B of A is the V of banking.
]]>I would close the account if not for the fact that it's one of my oldest cards and comprises a good chunk of my available credit.
]]>Might be time to get a credit card with a credit union. I know that most in my area won't charge above 17.99%
]]>When banks engage in de facto collusion by simultaneously creating these new fees, there are precious few "elsewheres" to go to. Not "no alternatives"--just few.
]]>To be sure, other things like the healthcare reform are decidedly NOT bipartisan. But nearly all the above-mentioned ones, were.
]]>@Duke_Newcombe sees what you did there...: you're 100% right. if people don't want to pay the fees, they go elsewhere. end of story, the world continues to turn. it is good to make people aware when banks start trying to sneak fees in rather than having to find out about them on your statement.
]]>Forget about any programs anyway, the fact of the matter is that Bush lost us a disgusting amount of money on pointless crap.
]]>@strife1012: Uh, the CARD act and the bailouts are not the same thing. Attempt-to-blame-everything-on-Obama fail.
]]>@Duke_Newcombe sees what you did there...: Yep and you would be suprised how fast I got my 100 million dollars after I sent $40,000 in legal fees to Nigeria.
]]>@craptastico: The fact that some people/companies break the law or look for loopholes in no way suggests we should do away with laws.
]]>#2 - The second rule of Fight Club is, you DO NOT talk about Fight Club.
]]>@Duke_Newcombe sees what you did there...:
But -1 for misapplying the analogy.
If this were the Milgram experiment, it would be being performed on middle management at BoA.
]]>Only if the # changes.
]]>But, they won't disclose anything about it except that it was a 3rd party.
]]>@JeniferF: I may be the exception to the rule. BOA always treated me great when I had accounts there, they would almost bend over backwards to help me out with various small problems. I have transferred all my balances to one of their credit cards, and am paying it off at 6% fixed interest. Their branches are not available in the state I live now, but my in laws who also live in this state have all their banking direct deposited to BOA out of state because their online bill pay rocks.
]]>Which I guess is what they're trying to accomplish; I'm one of those "deadbeat" customers who's actually responsible and pays in full every month, and I guess they can't have that. But, you know, it's ultimately their loss. If they treated me with the respect that is allegedly supposed to come with being a customer (via mergers) for just shy of 10 years, they could've convinced me to open some bank accounts or CDs or something.
Instead I get a letter stating I'm going to be punished because I'm actually responsible with my credit. Screw 'em.
]]>I've had a personal boycott on BofA since I was 16. I had a job back then decided to open a bank account with BofA. I was always treated very poorly whenever I had to deal with them (long story, lots of details), so I closed it and moved on.
I dislike them so much I've actually closed another bank account I had when it suddenly fell under these people due to a merger with another bank.
My husband thinks I'm silly to still avoid BofA like the plague, but stories on Consumerist about BofA always verify for me that it's still a good idea not to do business with them.
]]>Thanks Stimulus,
Thanks Obama.
Bankruptcy is there for a reason, they should have used it.
]]>thank you government. whenever the gov't tries to limit how much money a company can make, they fail. companies are a lot more creative than the gov't and they'll find a way to get what they want.
]]>Which is pretty much the idea.
]]>I called Bank of America and they did not have any answers. I'm trying the text chat feature now, but their only answer is to call the people I spoke with already.
Wait. Now they want me to call a different number.
I wish I could trust Bank of America more. I don't want to activate a new card that could magically have a higher rate or fees or something.
]]>@Onion_Volcano: Indeed
]]>Where is Tyler Durden when you need him?
]]>BOA has not started charging annual fees yet to my knowledge, so they haven't broken the law yet.
An annual fee would be terrible though since I am one of those scumbags who pay their cards off every month.
]]>That would be illegal in 47 states, but luckily Citi is headquartered in South Dakota, which abolished their Usury law. Thank goodness my local legislators can't protect me from out of state predatory lenders!
(I don't maintain a balance on this card, it's a high-powered reward card that I pay off. But it pisses me off nonetheless.)
]]>BofA seems to be breaking the law here.
That said, I received a letter from Citibank just last night telling me almost every fee on my MasterCard was being hiked from interest, to cash advance fees, to balance transfer fees. All are going up, up up. What a great way to rip off customers before CARD Act takes effect.
The government should immediately order a roll back of all fees and interest rates to what they were when CARD Act was enacted, not when it goes into effect.
I don't carry a balance nor take cash advances nor make balance transfers on my cards so these fees will have no meaning to me in real life. However. it certainly made me strongly dislike Citi for pulling something like this.
]]>