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Major Bank Is Charging Customers for ‘Free’ Accounts

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Bank of America is facing backlash over what many are calling a slight against dedicated customers.

The Charlotte-based bank announced that they would be eliminating free checking account options for eBanking customers, charging them a monthly fee of $12 unless they met certain standards.

The quota that customers must meet in order not to be charged is a minimum daily account balance of $1,500 or if the account holder has a direct deposit of $250 or more, according to the Charlotte Observer.

It was back in 2010 that the widespread bank introduced their eBanking accounts in an attempt to promote online banking, as it was a time when new federal regulations were expected to limit certain fees the industry had been charging.

The company promised customers no monthly fee in return for the account holder handling all transactions and statements online.

However, the bank eventually stopped offering new customers that same service as it began transitioning into digital banking, though existing customers were permitted to keep their original eBanking accounts.

This month has marked that years-long phaseout of the accounts, which started in 2015 — a move that has continued to anger customers who have even gone so far as to set up a Change.org petition against the company.

By Monday afternoon, more than 45,000 signatures had been added to the petition.

“I currently use eBanking and have had no need to use a teller,” one commenter stated on Change.org. “BofA, keep this feature available for the low-income people that don’t even go inside your banks.”

Others have decided to leave the bank behind completely, as one commenter wrote, “I am in the process of switching banks because of this.”

Yet many can’t understand why the bank has seemingly undermined those with low-incomes, as they are the group who may need the fee waived the most.

But the bank has countered that it hasn’t offered the account — which did not require a minimum balance before — for nearly five years, and has been transferring eBanking customers to the bank’s “Core Checking” account — where they must meet the $1,500 or $250 quota.

Bank of America spokeswoman Betty Riess explained that the direct deposit of $250 required is one of the lowest requirements in the industry, adding that the former program was established in a different banking environment than what company’s see today.

“Over the years we’ve been simplifying and streamlining our products,” Reiss stated. “Our core checking account provides full access to all our financial centers, ATMs, mobile and online banking.

As reported by the Charlotte Business Journal, Reiss added that the new program “offers several ways to avoid a monthly fee, including a monthly direct deposit of $250, which equates to $3,000 annually.”

For example, the bank stated that students under the age of 24 are eligible to have the $12 fee waived, so long as they are enrolled in high school, college or some other vocational program.

The recent change is suggested to be one of many, as chief executive Brian Moynihan continues to streamline the company by shedding “non-core” products and securing business with those who have strong credit scores, which the company labels as “prime” and “super prime” borrowers. (For more from the author of “Major Bank Is Charging Customers for ‘Free’ Accounts” please click HERE)

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Export-Import Bank’s Secret Dealings Demonstrate the Problem With Crony Capitalism

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The annual conference of the Export-Import Bank begins Thursday, which is an opportune time to catch up with the federal agency that doles out billions of dollars in subsidies to benefit foreign governments and titans of industry.

Of particular interest are transaction details that the bank won’t reveal, as well as its relatively limp support for small business.

Over at the bank’s downtown District of Columbia headquarters, most everyone is concerned about what President Donald Trump will do.

The Ex-Im charter is authorized through September 2019, but there are three vacancies on the five-seat board of directors. The lack of a quorum limits the size of bank deals to $10 million or less, including export loans and loan guarantees as well as capital and credit insurance. (That’s how it is supposed to work, in any event.)

Ex-Im opponents are hoping that the president will, at the very least, maintain the status quo—although the best course of action would be to eliminate the bank altogether. (More on that below.) But the Ex-Im lobby is pushing for Trump to nominate board candidates and negotiate their Senate confirmation. Doing so would free up billions of dollars in subsidies for Boeing Co., General Electric Co., Caterpillar, and the like—that is, multinational corporations that do not lack access to capital and which can finance exports without taxpayer handouts.

On the other hand, Congress could—at least conceivably—exercise leadership and phase the bank out of existence. It is not as if there is a shortage of private export financing: U.S. exports totaled $2.2 trillion in fiscal year 2016, with Ex-Im supporting just 0.22 percent ($5 billion).

Who benefitted from that $5 billion? Ex-Im officials are keeping mum, although the transactions are supposed to be public. But if allowed to operate in secret, citizens and their representatives in Congress cannot determine whether the bank is complying with the $10 million transaction limit or with the other rules it has violated in the past.

The Heritage Foundation made repeated requests in the past five weeks for information on 48 transactions in fiscal year 2016 that far exceeded the $10 million limit. For example, both JPMorgan Chase & Co. and TD Bank, N.A. were awarded a whopping $500 million on Dec. 14, 2015, and Wells Fargo & Co. was awarded $200 million on the same day. Several others were awarded between $15 million and $150 million.

According to Ex-Im officials, some of the awards in question represent taxpayer-backed insurance for U.S. banks that issue letters of credit used overseas to finance foreign firms’ purchases of American exports.

However, Ex-Im’s public database does not identify the borrowers or exporters, products or countries, involved in at least half of those 48 transactions, and multiple requests for details were in vain.

Ex-Im representatives claim that prior boards of directors have authorized bank staff to unilaterally approve short-term transactions that exceed $10 million. But they also said that individual transactions under this so-called delegated authority are subject to limits of $10 million for corporate entities, $25 million for financial institutions, and $35 million for sovereign entities.

Alas, without transaction details, neither Congress nor the public can determine whether the awards of $500 million, $200 million, $150 million, and the like were proper.

Also in fiscal year 2016, there were five transactions listed in the bank database as approved by the board—although there was no board quorum to approve deals at the time.

According to a bank representative, the working capital loans were approved by the board when a quorum existed, and represent installments of multiyear authorizations. However, the decision dates for the four transactions are listed as fiscal year 2016, and prior entries for the same companies do not indicate a multiyear authorization.

The one medium-term transaction, for Aeromexico, refers to an amendment to a transaction approved by the board in 2014, according to an Ex-Im representative. The nature of the amendment is unknown, although the representative did say that Ex-Im staff exercised their (supposed) delegated authority to approve the (supposedly proper) amendment.

Throughout the two-year debate over reauthorization of the Ex-Im charter, proponents incessantly claimed that small business was the bank’s “core mission.” That simply wasn’t true. Just 20 percent or less of total financing went to small businesses. But lacking a quorum, and thus barred from dispensing billions of dollars in export subsidies to the big guys, one might think that bank officials would maximize its small-business assistance.

But that didn’t happen. The bank reported $2.7 billion in authorizations to benefit small business in fiscal year 2016, which was about half of the level of small-business support from two years before. Obviously, they aren’t banging down Ex-Im’s door for help.

The vast majority of small-business exporters do not need—and do not receive—taxpayer subsidies. Indeed, small businesses ranked “exporting my products/services” as the least problematic of 75 business problems assessed in an annual survey by the National Federation of Independent Business Research Foundation. The cost of health care ranked as the most severe problem.

The debate about Ex-Im isn’t about helping small business. It is about the powerful bond between big business and big government. Ex-Im subsidies are neither the biggest nor worst manifestation of corporate welfare. But change in Washington is tortuous, and ending Ex-Im is a practical and rational target at present for reasons both material and ideological.

Despite overwhelming evidence to the contrary, some members of Congress believe that a few legislative tweaks will remedy all that is wrong with the bank. Ex-Im officials have thwarted past attempts by Congress to impose reforms.

More importantly, no amount of bureaucratic tinkering can shield taxpayers from bailouts in the event that bank reserves run dry—as occurred in the 1980s—nor will it protect American businesses from the disadvantages of the U.S. government subsidizing their foreign competitors.

There isn’t an economist alive who could coherently argue that Ex-Im subsidies don’t distort credit and labor markets—and always to the detriment of those who remain independent of the welfare state. That is why Trump and Congress must eliminate the bank, both to prove that cronyism can be restrained, and because it would most benefit the nation. (For more from the author of “Export-Import Bank’s Secret Dealings Demonstrate the Problem With Crony Capitalism” please click HERE)

Follow Joe Miller on Twitter HERE and Facebook HERE.

The Cash Crisis Begins as Chase to Start Charging 1% Fee on Bank Deposits

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Cash-Bundles-Bank-MoneyBy J. D. Heyes. As we predicted, the cash crisis in America is beginning, and the occasion has been marked by a recent announcement from one of the country’s largest banks. Beginning May 1, JPMorgan Chase will begin charging certain (wealthy) depositors for the “right” to keep their money in JPMorgan Chase banks.

As noted by GovtSlaves.info, the bank sent some of its larger depositors a letter that said it would charge them a “balance sheet utilization fee” of 1 percent annually on deposits in excess of the money they require for operations. In other words, that amounts to a negative interest rate on many of those deposits.

“The targeted customers – mostly other financial institutions – are already snatching their money out of the bank,” Bloomberg News reports, adding that this is “exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far” . . .

Peter Coy, writing for Bloomberg News, urged readers to “pause for a second” to “marvel at how strange this is.” Historically, banks have always paid interest to depositors; it was a reward, of sorts, to depositors by the banks for the use of depositors’ money to make loans and conduct additional financial business that enabled the bank to make money.

Now, however, keeping huge amounts of cash on hand is apparently no longer seen as good business. Large financial institutions like JPMorgan Chase are shunning cash unless customers “are willing to pay for the privilege” of depositing it, Coy wrote. (Read more from “The Cash Crisis Begins as Chase to Start Charging 1% Fee on Bank Deposits” HERE)

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The Death of Cash

By Peter Coy. JPMorgan Chase recently sent a letter to some of its large depositors telling them it didn’t want their stinking money anymore. Well, not in those words. The bank coined a euphemism: Beginning on May 1, it said, it will charge certain customers a “balance sheet utilization fee” of 1 percent a year on deposits in excess of the money they need for their operations. That amounts to a negative interest rate on deposits. The targeted customers—mostly other financial institutions—are already snatching their money out of the bank. Which is exactly what Chief Executive Officer Jamie Dimon wants. The goal is to shed $100 billion in deposits, and he’s about 20 percent of the way there so far.

Pause for a second and marvel at how strange this is. Banks have always paid interest to depositors. We’ve entered a new era of surplus in which banks—some, anyway—are deigning to accept money only if customers are willing to pay for the privilege. Nick Bunker, a policy analyst at the Washington Center for Equitable Growth, was so dazzled by interest rates’ falling into negative territory that he headlined his analysis after a Doors song, Break on Through (to the Other Side).

In recent months, negative rates have become widespread in Europe’s financial capitals. The European Central Bank, struggling to ignite growth, has a deposit rate of –0.2 percent. The Swiss National Bank, which worries that a rise of the Swiss franc will hurt trade, has a deposit rate of –0.75 percent. On April 21 the cost for banks to borrow from each other in euros (the euro interbank offered rate, or Euribor) tipped negative for the first time. And as of April 17, bonds comprising 31 percent of the value of the Bloomberg Eurozone Sovereign Bond Index—€1.8 trillion ($1.93 trillion) worth—were trading with negative yields. (Read more about the fee on bank deposits HERE)

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Deutsche Bank: Only Jesus Can Save The Eurozone

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Photo Credit: Getty Images

Deutsche Bank‘s global head of FX strategy, Bilal Hafeez, recently gave a speech at the annual Deutsche Bank Mittelstand (small and medium-sized enterprises) FX conference in Hamburg, Germany.

The bank’s research department transcribed Hafeez’s speech and sent it out to clients in a note.

The speech focuses on the euro area’s economic woes and the need for the currency bloc to move forward with further integration in order to be economically successful.

Hafeez opens the speech with a reflection on parenting and a child’s years as a “terrible teen.” Then, he makes an interesting comparison to the euro area, complete with a religious allegory.

Hafeez said the euro area needs a role model that people across Europe can respect. “I can only think of one figure that is respected by most Europeans and has never sinned, Jesus!” said Hafeez.

Read more from this story HERE.

Short-Circuiting Sanctions: E.U. Courts Overturn Sanctions On Iranian Banks

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Photo Credit: APEuropean Union courts have quietly rolled back economic sanctions on several Iranian banks that have long been suspected of transferring funds to terrorist groups such as Hamas, Hezbollah, and Palestinian Islamic Jihad.

The Wednesday announcement of the removal of Iran’s Bank Saderat from the E.U.’s sanctions list has caused concern among experts and some on Capitol Hill who warn the E.U.’s decision could erase years of progress on the economic sanctions front.

Bank Saderat is at least the third Iranian bank to have won an E.U. sanctions reprieve since December.

An E.U. court recently ruled that the sanctions against Bank Saderat were “illegal” and ordered they be removed, according to reports in Iran’s state run media.

“The General Court of the European Union consequently ruled that the sanctions imposed against the Iranian bank were illegal and accepted the bank’s request to lift the restrictions,” Iran’s Press TV quoted the bank as saying in a statement.

Read more from this story HERE.