Two Democratic congressmen are chastising Bank of America for its recent decision to stop offering checking accounts that were free to many consumers.
Reps. Elijah Cummings of Maryland and Jimmy Gomez of California noted Friday that the bank’s action comes shortly after the passage of tax legislation that will yield big financial benefits for Charlotte, N.C.-based B of A.
“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 congressmen wrote in a letter to Bank of America CEO Brian Moynihan.
The congressmen requested a briefing from B of A officials. They also asked the $2.2 trillion-asset bank to turn over documents showing how many customers will be affected and the annual cost of providing free accounts.
A Bank of America spokeswoman noted in an email that the bank stopped offering the account to new customers in 2013. She added that the bank "will be pleased to explain to these members the many ways we provide straightforward and transparent service, including to low-to-moderate income customers."
More than 106,000 people have signed a petition at Change.org urging B of A to reconsider its decision to stop offering the accounts.
The letter from Cumming and Gomez is an indication that the Republican-backed tax legislation, which many banks have cited as the basis for their recent decisions to boost the pay of low-wage employees, can be a double-edged sword for the industry.
The Bank of America checking accounts that are being discontinued were free for customers who received their statements electronically and refrained from using tellers for routine transactions. Otherwise, customers paid an $8.95 monthly fee.
B of A informed affected customers that their funds will be moved into a different checking account, which costs $12 per month, unless the customer has a direct deposit of at least $250 per month or keeps a minimum daily balance of at least $1,500.
A third type of account offered by Bank of America costs $4.95 per month and does not include overdraft fees, but customers would have to ask to enroll.