EVANSTON, Ill. --- Bank of America has faced a backlash over its plan to charge customers a monthly fee to use debit cards.
Last month’s decision by the Charlotte-based bank is the latest in an effort by several financial institutions to recoup revenues they say have been lost by increased government regulation.
Mitchell Petersen, the Glen Vasel Professor of Finance at Northwestern University’s Kellogg School of Management, says that might not be entirely true.
“Five years ago, they also could have raised fees,” Petersen says. “If they’re raising them now to replace lost profits, they’re implicitly saying they didn’t raise them five years ago because they were making enough money.”
Petersen says there are very few businesses that won’t take advantage of an opportunity to make a profit. He says banks are raising fees now because they believe there is a general industry trend to do so, leaving consumers with fewer feeless options.
In this audio Q&A, Petersen discusses bank fees and what consumers can do if they are unhappy with their banking situation.