Bank of America Corp.'s recent foray into debit-card fees - and the pullback that followed - illustrates the difficulties in today's financial sector, chief executive Brian Moynihan said Tuesday, adding: "We learned from the experience."
He said the bank would offer more transparency in its fees going forward and also would seek to boost profits in its consumer business by trimming expenses and encouraging customers to do more of their banking there.
The comments were part of a wide-ranging talk at the Bank of America Merrill Lynch Banking and Financial Services Conference in New York. The chief executive outlined the Charlotte-based bank's strategy for navigating a slow-growth economy and leading in an industry that "continues to face challenges of reputation and restoring its trust."
It was one of Moynihan's first public presentations since the debit-fee debate, which sparked harsh criticism from consumers and politicians, fueled "Bank Transfer Day" protests and drove Moynihan to tell employees he was "incensed" by the attacks.
As he wraps up his second year as CEO, Moynihan remains under pressure from regulators, investors and analysts - and the nation's second-largest bank by assets faces continued challenges amid new federal regulations, low interest rates and consumer backlash over fees, all of which could dampen profits.
The shaky economy presents more hurdles. For at least the next year or two, Moynihan expects the lingering effects of the financial crisis, particularly the housing market, to weigh on the banking industry.
Now, the bank's major initiatives include restructuring its consumer banking model, rebuilding capital and streamlining operations, Moynihan said.
"At Bank of America, we have spent the last two years transforming our franchise," he said. "The steps we have taken have moved us in the direction of more customer/client focus, less complexity and more transparency."
The bank's planned $5 debit fee was in response to new government regulations that cap the "swipe fees" merchants pay banks when customers pay with their debit cards. Answering a question Tuesday on how the bank would make up that revenue after scrapping the fee, Moynihan reiterated that Bank of America would encourage people to do more business there by eliminating fees for those who "bring their entire relationship" to the bank.
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