I'm Angry At Bank of America

While on the Twitter the other day, I noticed J. Money from Budgets Are Sexy posted an excited tweet containing a link to a Huffington Post article about Bank of America eliminating overdraft fees. The United States has passed legislation prohibiting banks from charging overdraft fees unless customers sign a form expressly giving the bank permission to give them an overdraft account. Bank of America has gone one step further and banned overdraft all together, forfeiting all future revenue with them. How does J. Money feel about that? Take it away…

Bank Of America Dropping Overdraft Fees- (Rock! Hope others follow!!)

Oh Twitter. So succinct. (As an aside, does J. Money get paid by the exclamation mark? He uses a lot of them.)

Although I’m not a shareholder in Bank of America, I’m downright ticked off that Bank of America would just abandon such a lucrative revenue source, considering the economic times we’re in and the great margins associated with the fees. They give customers money temporarily, then charge huge fees when they pay it back. Since everything takes place inside the security of a bank account, the loan is pretty much risk free. So many people’s paychecks would just magically appear in their accounts just in time to pay off the loan and give BoA and other banks ridiculous profits.

I’m in favor of making overdraft an opt-in program rather than an opt-out program. Yet if I was Bank of America, I would ask every single one of my customers if they wanted to sign up for overdraft. I’d market it as a great contingency plan for life’s little speed bumps. Yes, if I was the bank, I would market an overdraft account as an emergency fund. And I’d get tons of people to sign up.

Remember folks, what’s best for business isn’t usually the best for you. I could list a million examples of businesses that are completely legal and yet aren’t even remotely in your best interests. Even though you might be really good at money stuff, you might be like me and eat a few too many cheeseburgers. How are cheeseburgers any different than overdraft fees? Both aren’t good for you, yet you should have the right to have them if you want, consequences be damned.

When I’m a shareholder of a company, I expect that company to do whatever it takes, short of breaking the law, to make money. Yes, I want every bank I’m a shareholder of to take advantage of people’s stupidity. I want people to be able to do incredibly stupid things. A government cannot legislate a minimum level of intelligence.

That’s the crux of the overdraft issue. Let me say again, I am not in favor of a bank just giving someone an overdraft account. I am in favor, however, of somebody being able to sign up for one, provided they know what they’re signing up for. It’s about freedom. Companies should have the right to offer whatever they want, provided it’s legal. That’s what capitalism is all about.