The big banks are hoping to be beyond the recent flap over poorly processed foreclosure paperwork by saying they now believe the documents are complete.
However, just because the banks say the crisis is over, does not mean that regulators will allow them to get back to business as usual.
Attorneys general in all fifty states, lawyers of foreclosed homeowners, judges and state lawmakers are all preparing for a battle that could land banks in courts all over the country.
On Tuesday, Bank of America Corp. reported losing $7.7 billion in the third quarter because of legislation passed during the summer making changes to credit and debit card fee structures.
To help make up some of that lost money, the bank also announced that it was altering its approach to consumer banking, hoping to encourage more customers to do business with the bank instead of getting revenue through fees. Bank of American has already made some change like getting rid of overdraft fees for small charges made with debit cards.
Bank of American is also doing way with some of its free checking account promotions and asking customers to pay fees to speak directly with bank tellers for some transactions.
“I’ve seen more regulation in last 30 months than in last 30 years,” said Robert Hammer, CEO of bank advisory firm RK Hammer. “The bottom line for banks is shifting enormously, swiftly and deeply, and they’re not going to sit by twiddling their thumbs. They’re going to change.”
Fees charged by banks were considered extremely lucrative to their bottom lines. It is estimated that fees are as much as 12 percent of Bank of America’s revenue.
Bank of America chief executive Brian Moynihan said in a conference call this week that overdraft fees had helped the company generate lots of income, but they also meant the bank was losing customers who were upset over the high fees.
Shares of Bank of America (NYSE:BAC) are trading at $11.36 and down $1.05 from Tuesday’s high of $12.41 per share. Many of the bank stocks have trended lower since the ‘robo-signing’ investigations.