Two Democratic U.S. representatives on Friday criticized Bank of America for its decision to eliminate a popular free-checking account.
The congressmen, Maryland’s Elijah Cummings and California’s Jimmy Gomez, in a letter to bank CEO Brian Moynihan pointed out that many low-income American families rely on the account. The lawmakers also questioned the bank’s move in light of the lift it receives from last month’s federal legislation slashing taxes for corporations.
In 2018 alone, the Charlotte-based bank is expected to enjoy $3.5 billion in savings from the lower tax rate, the letter says, citing data posted by a progressive website.
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“It is difficult to understand why one of America’s largest banks would end a program that many low-income American families rely on just weeks after benefiting from one of the largest tax cuts in American history,” the lawmakers wrote.
In a statement, Bank of America spokeswoman Betty Riess noted the bank stopped offering the eBanking account to new customers five years ago.
“We will be pleased to explain to these members the many ways we provide straightforward and transparent service, including to low-to-moderate income customers,” she said.
This month marks the completion of a years-long phaseout of the eBanking account, which didn’t charge a monthly maintenance fee as long as customers received paperless statements and didn’t use bank tellers for routine transactions. Otherwise, customers paid an $8.95 monthly maintenance fee.
The bank introduced the account in 2010, at a time when expected new federal regulations were predicted to limit many fees the industry had been charging.
Bank of America has transferred eBanking customers to its “Core Checking” account. That account requires a $12 monthly fee unless customers have a daily balance of at least $1,500 or at least one direct deposit of $250 or more.
In their letter, the lawmakers request a briefing from Bank of America officials on the decision and for the bank to provide documents by Feb. 9. The information requested includes the number of people enrolled in free accounts at the bank, as well as analysis of how the tax overhaul affects Bank of America’s financial results.
It adds to the chorus of opposition the bank has received over the move from consumer advocates and others. A petition on Change.org has collected more than 106,800 signatures.
Riess, the Bank of America spokeswoman, pointed out that the bank also offers a “SafeBalance” account for customers looking for a low-priced option. That account has a flat monthly fee of $4.95 and does not allow overdrafts.