Dems question Bank of America for ending checking account program

Two Democrats on the House Oversight and Government Reform Committee are questioning why Bank of America ended a checking account program used by many low-income customers when the bank stands to benefit from President Trump’s new tax law.

“We strongly urge you to reconsider your decision to end this program and instead consider the exact opposite approach — expanding your no-fee products and other programs to help low-income American families,” committee ranking member Elijah Cummings (D-Md.) and Rep. Jimmy Gomez (D-Calif.) said in a letter to the bank on Friday.

“One of the Republican talking points for the tax bill was that massive financial benefits would ‘trickle down’ to the less fortunate among us, but we have seen just the opposite in this case,” the lawmakers added.

Bank of America this month ended its eBanking accounts, which didn’t have a fee for customers who didn’t use tellers or paper statements. It is transferring the accounts to a program called Core Checking where customers have to keep a minimum balance or set up a monthly direct deposit in order to avoid a monthly fee.

The bank noted that it started phasing out the eBanking program, which it had designed for tech-savvy customers, in 2013. It says it notified customers of the switch-over weeks before the tax law was enacted.

“We stopped offering this account five years ago and 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,” said Bank of America spokeswoman Betty Riess.

“Our commitment to serving the needs of all our customers, including low-income, remains strong,” she aded.

“For customers who are looking for a low-priced option, our SafeBalance account is a flat $4.95 a month and does not allow overdrafts, which helps customers manage their money and spend only what they have,” she added. “Our Core Checking account offers several ways to avoid a monthly fee, including with monthly direct deposit of $250, which is one of the lowest qualifiers in the industry. The fee is also waived for students under the age of 24. In addition, all of our checking accounts provide full access to all our financial centers, ATMs, mobile and online banking.”  

The letter is one of a number of steps that Democrats have taken to battle back against some of the positive press Republicans have gotten because of the tax law.

Republicans have been highlighting announcements from Bank of America and other businesses that have said they would give their employees bonuses, while Democrats have pointed out that the bank and other companies have been announcing stock buybacks.

Cummings and Gomez are asking Bank of America about the end of the eBanking program in light of the fact that the company is expected to benefit from the new tax law. The law slashes the corporate tax rate from 35 percent to 21 percent.

“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 benefitting from one of the largest tax cuts in American history,” Cummings and Gomez wrote. “Surely, your corporation could have devoted at least a fraction of these massive savings to maintaining existing programs that help low-income families move towards financial security and independence rather than forcing them to turn to alternative financial services providers.”

The lawmakers are seeking information from Bank of America about the eBanking program and the effects of the new tax law on the company’s revenues.