Bank fees on the rise

[BigPapaVol]

I really, really doubt that was the cause. BOA has been hemorraging deposists lately.

They really only care about core deposits, because that satisfies regulatory capital requirements. Gross deposits doesn't. If they run off the little guys, who provide little in terms of regulatory capital or income opportunities, they're probably happier, but don't want that message to be the public face of this. Easier to heap it onto to congress as the troublemaker.

 

[VolsNSkinsFan]

I really, really doubt that was the cause. BOA has been hemorraging deposists lately.

The little man may be pulling their small accounts here and there, but BOA isnt just a bank, they own Merrill Lynch. With turmoil at Morgan Stanley, I am sure Merrill is cleaning their clock.

More evidence of deposits pouring into the big banks can be seen in todays Wells Fargo earnings call

3rd UPDATE: Wells Fargo 3Q Misses Expectations As Margins Slump - WSJ.com

The San Francisco bank, the nation's fourth-largest by assets, focuses more on traditional banking of lending to consumers and businesses than it does on investment banking, which was expected to give it a leg up on its biggest competitors. But while it did report strong business lending growth, the bank couldn't lend as fast as deposits poured in, slamming its most basic profit margin.

 

[BigPapaVol]

The little man may be pulling their small accounts here and there, but BOA isnt just a bank, they own Merrill Lynch. With turmoil at Morgan Stanley, I am sure Merrill is cleaning their clock.

More evidence of deposits pouring into the big banks can be seen in todays Wells Fargo earnings call

3rd UPDATE: Wells Fargo 3Q Misses Expectations As Margins Slump - WSJ.com

the deposits pouring in is a function of several things, but a lot is about people just departing the markets and hoarding. Those tend to be brokered deposits and are expensive, which is why it kills Net Interest Margin. They like them because brokered deposits are timeline driven and typically fixed rate, so they can be tied to lending projects and margins fixed, but they are expensive with no offsetting loans.

 

[bamawriter]

The little man may be pulling their small accounts here and there, but BOA isnt just a bank, they own Merrill Lynch. With turmoil at Morgan Stanley, I am sure Merrill is cleaning their clock.

More evidence of deposits pouring into the big banks can be seen in todays Wells Fargo earnings call

3rd UPDATE: Wells Fargo 3Q Misses Expectations As Margins Slump - WSJ.com

BOA's fee for using a branch X number of times every month is an attempt to run small depositors off. But the $5 fee is a response to Durbin like it is at every other large bank.

 

[BigPapaVol]

BOA's fee for using a branch X number of times every month is an attempt to run small depositors off. But the $5 fee is a response to Durbin like it is at every other large bank.

it's all a bit of an effort to run off small depositors or those who don't carry balances. They make money by leveraging deposits to the hilt. If a depositor doesn't help with that and they can't kill him with transactional fees, then they're best off without them. It is to some degree about congress, but it's just as much about being opportunistic about booting customers to the street.

 

[bamawriter]

it's all a bit of an effort to run off small depositors or those who don't carry balances. They make money by leveraging deposits to the hilt. If a depositor doesn't help with that and they can't kill him with transactional fees, then they're best off without them. It is to some degree about congress, but it's just as much about being opportunistic about booting customers to the street.

Durbin made those customers less valuable since the interchange income disappeared. I'm not arguing that. I'm simply arguing against the idea that BOA started charging the $5 fee because they suddenly got a bunch of deposits this Summer. They would have been more than happy with those LCDs if Durbin didn't destroy their value.

I also doubt that BOA really had that big of an uptick this Summer, since they have been trending down in deposits for a couple of years. Why would people suddenly go rushing to open accounts there when they charge ridiculous fees (even before Durbin) and offer horrible service?