Bank of America®, which boasts one of the largest ATM networks in the nation, has reduced its fleet considerably this year. Bloomberg reports that the bank has scaled back its ATM network by 9 percent in 2012, by not renewing leases with gas stations and malls. It’s all part of Brian Moynihan’s Project New BAC — but what could it mean for consumers?
The bank has dropped 1,536 ATMs from its network in the first half of 2012, according to Bloomberg. It still has 16,220 ATMs, which is among the largest bank-specific networks, but it is diminished considerably.
Bank of America® decided against renewing its leases with both Valero, the gas station chain, and Simon Property Group, “the biggest U.S. shopping mall owner.” While a bank branch ATM costs about $1,100 a month to operate, remote ATMs cost $600 more, according to the story:
“When they put an ATM in a mall or gas station, they have to rent that space in the same way that Sunglass Hut has to pay for their space,” said Bart Narter, a senior banking analyst at consulting firm Celent. “They did the math and probably concluded that these guys aren’t profitable.”
This downsizing of the ATM network is part of CEO Brian Moynihan’s plan to make Bank of America® leaner and meaner than Ken Lewis left it. Bloomberg reports that Moynihan has also shuttered 108 branches just this year.
For consumers, this could mean more fees — especially if they’re accustomed to grabbing cash from the gas station or the mall. Most of Bank of America®’s checking accounts charge $2 for each withdrawal from a non-Bank of America® ATM, and that’s on top of whatever fees the ATM assesses — this can easily add up to $5 for a withdrawal.
Though it may be an unintended side effect of reducing branch and ATM networks, Bank of America® will likely harvest more fees from its users due to increased difficulty of locating its ATMs. Well, maybe its customers were spoiled with a ubiquitous and expensive-to-operate ATM network, maybe not. But either way, the end result is good for Bank of America® and not-so-good for some of its customers.