Bank of America Has It Right on Fees, So Back Off (Update 2)

Updated from 11:08 a.m. ET with statement from Bank of America that says new fee structure will only apply to new deposit accounts.

NEW YORK (TheStreet) -- Let's put on our thinking caps before the inevitable and tiresome outcry against Bank of America's (BAC) coming deposit service and fee changes.

The Wall Street Journal on Thursday reported that Bank of America was "working on sweeping changes that would require many users of basic checking accounts to pay a monthly fee unless they agree to bank online, buy more products or maintain certain balances."

A Bank of America spokesperson says that "there is nothing new in the Wall Street Journal article," since the company had previously disclosed the "new solutions we are testing in Massachusetts, Arizona and Georgia, and all of them offer ways to avoid monthly maintenance fees. If customers do their basic banking online or via ATM, there are no fees."

The spokesperson confirms that a customer who only has a checking account with Bank of America, can avoid all service fees by switching over to electronic banking, which includes free electronic bill paying.

The company later provided additional detail, calling media reports of new fees for existing customers "inaccurate," and saying "Bank of America is not planning to increase checking account fees with our existing customers."

In a statement, the company added that "since January 2011, Bank of America has been testing checking account options for new accounts only, in Arizona, Georgia and Massachusetts," and that BAC "is continuing to learn from those tests and has not made any decisions about when, how, or if we would change our fees on new accounts."

Bank of America's plan last year to institute a $5 monthly fee for the privilege of using a debit card was not well thought out, and after a predictable outcry, the company backed off.

This time it's different, and the company has no choice. The recent political and regulatory curbs on deposit account service charges began on Aug. 15, 2010, when the Federal Reserve implemented new rules requiring banks only to provide expensive ATM and debit card overdraft protection for customers who previously signed up for the service.

The first full quarter of operations under the new rule was the fourth quarter of 2010, when Bank of America's service charges on deposits accounts dropped 36% from a year earlier, to $$1.3 billion, according to HighlineFI.

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When the "opt-in" rule went into effect, Bank of America eliminated all point-of-sale overdraft protection for debit card purchases, which a company spokesperson says "has significantly limited customers' ability to unknowingly overdraw their accounts and eliminates unexpected overdraft fees on these transactions."

For ATM transactions that could cause an overdraft, Bank of America says "we alert customers in advance that a transaction might cause an overdraft and result in a fee, and the customer can choose whether or not to proceed with the transaction."