BofA chief: We have a 'right to make a profit'

@CNNMoney October 5, 2011: 6:31 PM ET

Bank of America's CEO defends $5 fee.

WASHINGTON (CNNMoney) -- Bank of America's CEO defended his bank's new $5 fee on debit cards on Wednesday, saying that customers and shareholders understand the bank has a "right to make a profit."

Bank of America (BAC, Fortune 500) CEO Brian Moynihan defended the move, which the bank announced last week in response to new caps on debit card swipe fees that the banks charge retailers.

Bank of America's announcement of a new debit card fee was followed today by an announcement of new checking account fees by Citibank (C, Fortune 500). These new bank fees have fueled a populist backlash that has coincided with a series of protests against Wall Street banks around the nation.

Moynihan stopped short of criticizing President Obama who earlier this week said to ABC that banks don't have an "inherent right" to a "certain amount of profit."

But BofA's chief did say banks have an inherent right to make a profit in an interview Wednesday with CNBC's Larry Kudlow at the Washington Ideas Forum, sponsored by the Newseum, the Aspen Institute and the Atlantic magazine.

"I have an inherent duty as a CEO of a publicly owned company to get a return for my shareholders," Moynihan said.

Bank of America cutting 30,000 jobs

Moynihan said that the bank will talk to its customers, teammates and shareholders and "they'll understand what we're doing -- understand we have a right to make a profit."

Moynihan said the bank had made the fee clear and transparent to its customers and noted the bank had given plenty of advance notice because the fee won't kick in until next year.

But he said the new charge was necessary because the "ability to be profitable" in retail banking has changed. He added that Wall Street reforms in the so-called Dodd-Frank Act will cost his bank "billions."

When Kudlow asked Moynihan if he felt the bank was under attack, Moynihan said "no."

"We have the best bank in the world, we do a great job for our customers," he added.

9 most annoying bank fees

Later, Moynihan was asked about an entirely different issue, whether he supported a proposed tax on millionaires that Senate Democrats proposed today.

He said he'd echo what he hears from his millionaire customers: "Yes, but what for?"

"If the belief is that it puts our fiscal house in order, then they support that," Moynihan said. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
View rates in your area
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.