Bank of America $5 Debit Card Fees!

NEW YORK (AP) -- Bank of America will start charging debit-card users $5 a month to pay for purchases. The move comes as the cards increasingly replace cash and as banks look for ways to offset the loss of revenue from a new rule that will limit how much they can collect from merchants.

Paying to use a debit card was unheard of before this year and is still a novel concept for many consumers. But several banks have recently introduced or started testing debit card fees. That's in addition to the spate of other unwelcome changes checking account customers have seen in the past year. Bank of America will begin charging the fee early next year.

Bank of America's announcement carries added weight because it is the largest U.S. bank by deposits.

The fee will apply to basic accounts, which are marketed toward those with modest balances, and will be in addition to any existing monthly service fees. For example, one such account charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500.

Customers will only be charged the fee if they use their debit cards for purchases in any given month, said Anne Pace, a Bank of America spokeswoman. Those who only use their cards at ATMs won't have to pay.

The debit card fee is just the latest twist in the rapidly evolving market for checking accounts.

A study by Bankrate.com this week found that just 45 percent of checking accounts are now free with no strings attached, down from 65 percent last year and 76 percent in 2009. Customers can still get free checking in most cases, but only if they meet certain conditions, such as setting up direct deposit.

The study also found that the total average cost for using an ATM rose to $3.81, from $3.74, the year before. The average overdraft fee inched up to $30.83, from $30.47

The changes come ahead of a regulation that goes into effect next month.

Starting Oct. 1, the regulation will cap the fees that banks can collect from merchants whenever customers swipe their debit cards. Those fees generated $19 billion in revenue for banks in 2009, according to the Nilson Report, which tracks the payments industry.

There is no similar cap on the merchant fees that banks can collect when customers use their credit cards, however. That means many banks are increasingly encouraging customers to reach for their credit cards, in hopes of reversing a trend toward debit card usage in the past several years.

An increasing reliance on credit cards would be particularly beneficial for big institutions like Bank of America, which have large credit card portfolios, notes Bart Narter, a banking analyst with Celent, a consulting firm.

"It's become a more profitable business, at least in relation to debit cards," Narter said.

This summer, an Associated Press-GfK poll found that two-thirds of consumers use debit cards more frequently than credit cards. But when asked how they would react if they were charged a $3 monthly debit card fee, 61 percent said they'd find another way to pay.

With a $5 fee, 66 percent said they would change their payment method.

Several banks are nevertheless moving ahead with debit card fees.

SunTrust, a regional bank based in Atlanta, began charging a $5 debit card fee on its basic checking accounts this summer. Regions Financial, which is based in Birmingham, Ala., plans to start charging a $4 fee next month.

Chase and Wells Fargo are also testing $3 monthly debit card fees in select markets. Neither bank has said when it will make a final decision on whether to roll out the fee more broadly.

The growing prevalence of the debit card fee is alarming for Josh Wood, a 32-year-old financial adviser in Amarillo, Texas.

Wood relies entirely on debit cards to avoid interest charges on a credit card. If his bank, Wells Fargo, began charging a debit card fee, he said he would take his business to a credit union.

If a debit fee became so prevalent that it was unavoidable, Wood said he's not sure how he'd react.

"I might use all cash. Or go back to writing checks," he said.

Bank of America's debit card fee will be rolled out in stages starting with select states in early 2012. The company would not say which states would be affected first.

Six Million Suffer In Blackout! Was It Human Error?

The day after the largest power failure in California history left millions in Southern California, western Arizona and northern Mexico without electricity during one of the hottest weeks of the year, local and federal officials promised Friday to investigate the cause.

The blackout was concentrated in San Diego, and San Diego Gas & Electric, which supplies power to most of the region, said it was still examining how the failure had spread so widely. But the initial cause, it said, appeared to be human error in Arizona that took down a line that provides power to the San Diego area. A major nuclear power plant in San Onofre, about 50 miles north of San Diego, also shut down, causing more failures, officials said.

Battleship Los Angeles!

The USS Iowa, a vessel used in battle during World War II, is headed to a new home in the Port of Los Angeles. The Navy has announced that the ship has been awarded to the Pacific Battleship Center, a nonprofit organization, and the Iowa will ultimately call Berth 87 in San Pedro home.

Getting the Iowa is actually quite an honor, and it is expected to do much to help draw tourists (and their almighty dollars) to the waterfront area.

The USS Iowa has a pretty remarkable history since its keel was first laid down in June, 1940 in the Navy's Brooklyn, New York shipyard. Equipped with a special bathtub for then-President Franklin D. Roosevelt, the Iowa was commissioned in 1943, and saw battle in World War II, and the Korean War. The Iowa was revived under then-President Ronald Reagan's 600-ship Navy plan in the early 80s, the vessel was modernized and returned to use for a few years. The ship was decommissioned for the last time on October 26th, 1990.

The ship will head to L.A. most likely next month, depending on the tides and the weather, and following the completion of some necessary national-level paperwork. Once in Southern California, the Iowa will get a hull cleaning, and then get some work done to make her ready to welcome aboard the expected tourists.

LA workers call for better wages, pensions for Labor Day!

Many Southern Californians marked Labor Day by calling for more rights for workers. In Wilmington, hundreds of people marched in solidarity for better wages and pensions.

"With everything that's going on in the economy, I think the biggest message that we can send is jobs," said Luther Medina, vice president of the Metal Workers Union. "That's what it's all about. We need to let the politicians know that organized labor and workers in general are kind of fed up with the status quo."

The march began at Broad Avenue and E Street, and they headed to Banning Park, where a rally was under way

Union members, politicians and community members said they wanted to send the message that hard workers deserve a decent wage, health care benefits and good pension plans.

This is the 32nd annual Labor Solidarity March. Union leaders said now more than ever was the time to get their message out.

"We've got to keep up the fight. This is to say we're in solidarity, that we're not going to allow a Wisconsin to go on here in California," said Rep. Laura Richardson (D - Long Beach)

The Worst of LA!

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Deadly Weekend on LA Roads

A fiery crash on the 110 Freeway and several other traffic accidents have claimed the lives of five people on Los Angeles County streets and highways so far over the Labor Day weekend, authorities said.

L.A. County Sheriff's Explorers seek clues in colleague's killing

It was their first homicide case. And it hit close to home.

Dozens of teenage Los Angeles County Sheriff's Department Explorers went door-to-door Saturday in the unincorporated county area of South Whittier looking for witnesses to the drive-by shooting death of a member of their Explorer unit.

Hollywood Shooting Outside La Vida

​Getting kicked out of Hollywood nightclubs: It happens to the best of us. It also happens to the worst of us, going by last night's shenanigans outside club La Vida along the Sunset Strip:

After a young man in his 20s got kicked out for being "unruly," along with two unruly sidekicks, he decided his V.I.P. ass would not stand for such treatment. LAPD officers tell City News Service that the man fetched a handgun from his car down the street, and returned to show La Vida what he was made of.

High Surf!

Dangerously high waves likely caused a smuggling boat to crash on a Southern California beach in Ventura where more than 500 pounds of marijuana washed ashore, authorities said.

Lindsey Templeton, a California State Parks superintendent, said rangers found the abandoned boat split in half Thursday near Point
Mugu.


Templeton says the surf was 6 to 9 feet at the beach.

Authorities are warning swimmers and surfers to be careful because of high waves and strong rip currents that hit Central and Southern California through the day.

The Coast Guard suspended its search for a body-boarder who vanished off the Surfside area of Huntington Beach.

There was a rip current in the area where Jowayne Binford disappeared Wednesday.

4.3 Quake

Weak shaking from a magnitude 4.3 earthquake in the San Fernando Valley was felt as far away as the Grapevine and Orange County, according to the U.S. Geological Survey.

But the shaking was not enough to cause damage. And the shaking was variable, depending on the neighborhood.

For example, Anthony Guarino, a seismic analyst at Caltech in Pasadena, said he didn’t feel the quake, but his colleagues across the street at the U.S. Geological Survey felt a sharp jolt.