At the beginning of the year Bank of America smugly petitioned college students on campus to sign up for new bank accounts; bank accounts that would inevitably throw them into the dangerous realm of debt. Forty dollars overdraft fees for small debit purchases, sometimes only of the amount of three dollars for a coffee, were responsible for offsetting a series of overdrafts that could amount to unimaginable money owed to the bank.
According to the Los Angeles Times on March 10, the Center for Responsible Lending said in a statement applauding Bank of America’s new policy, “Bank of America’s decision will allow millions more Americans to use their debit without fear of being driven into high-cost debt.”
Bank of America, which used to reap a large profit off of their overdraft fees and charges to personal accounts, has had to wipe that smug attitude away. After pressure from the Federal Government they have vied to eliminate ridiculous overdraft fees possibly in the interest of gaining back some of their lost credibility.
Instead, the bank has proposed an overdraft system that has defined the new motis of operendi (latin for methods of operating) for other major financial institutions. Now Bank of America seeks to set up personal accounts that are attached to debit cards in such a way that the purchases exceeding the current balance are declined at the time of purchase. This is quite different from their previous money grabbing ways. It actually seems as though the bank is trying to help customers rather than drag them into a doom of amounting debt.
The new policy is set to begin this summer, 2010. Although far from helpful to a bank’s marketing strategy, this seemingly thoughtful plan of action will save thousands of students from graduating college debt free and with good credit, things that most Americans need to maintain a sufficient lifestyle during this recession.
However, something that would benefit regular people rather than large corporations and bank CEOs seems too good to be true. It leads one to wonder what corporations, banks and financial institutions really have in store for us.
Ruby Strait ’11 expands on this thought, “plain and simple I will not trust them in the future,” she stated. This is mainly due to the fact that in the past she had to pay over 800 dollars in overdraft fees. “The current decision they are making has two outcomes,” she considers, “either they are really trying to help their customers or they have found a new loophole to take money from their unknowing clientele…I hate Bank of America,” she added.
On the other hand, Courtney Gillfiligan ’11, offers a more optimistic outlook. She believes Bank of America has learned its lesson and expressed sincere accountability for their exploitative past actions. “I think they will be responsible and they will make it really easy to avoid overdrafts with notices and such when your balance is low.”
So, is Bank of America’s altruistic behavior another cover up of the many mistakes and illicit activities going on behind the scenes of major financial institutions, or are bank CEO’s really attempting to demonstrate their remorse and belief in accountability? For now let’s hope they are finally doing what is in our best interest.
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