http://www.nytimes.com/2011/11/02/business/bank-of-america-drops-plan-for-debit-card-fee.html
Bank of America Drops Plan for Debit Card Fee
By TARA SIEGEL BERNARD
Bank of America said Tuesday that it was abandoning its plan to charge its customers a $5 fee to use their debit cards, just a month after announcing the new fee.
The reversal follows a huge backlash from customers, one of whom collected more than 200,000 signatures urging the bank to rethink its plan.
The bank listened, but only after other large banks had indicated that they would not impose similar fees. Wells Fargo, JPMorgan Chase, SunTrust and Regions Financial have all pulled back on their plans.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer at Bank of America, said in a statement. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
Wells Fargo said Friday that it was canceling a test that would have imposed a $3-a-month charge on debit card holders in Georgia, Nevada, New Mexico, Washington and Oregon. JPMorgan Chase, which was testing a $3-a-month charge, decided it would not impose a stand-alone debit card use fee. And SunTrust and Regions have both said they would no longer charge the fees.
But Bank of America, the nation’s second-largest bank after JPMorgan Chase, took the brunt of the criticism, which came from all corners, including Capitol Hill and the White House. Days after the bank announced that it would charge the fee, President Obama said customers should not be “mistreated” in pursuit of profit, while Vice President Joseph R. Biden Jr. called the move “incredibly tone deaf.”
The debit card fee was supposed to have gone into effect in January.
The new fees were part of efforts by the banks to raise revenue lost elsewhere.
In October, a new rule went into effect that limits the fees banks can levy on merchants every time a consumer uses a debit card to make a purchase. The new limit is expected to cost the banks about $6.6 billion in revenue a year, beginning in 2012, according to Javelin Strategy and Research. That comes on top of another loss, of $5.6 billion, from new rules restricting overdraft fees, which went into effect in July 2010.
But consumers have little sympathy for the banks’ loss of revenue. In fact, consumer groups have called for Saturday to be “Bank Transfer Day,” where customers of big banks move their accounts to community banks and credit unions.
“Bank of America’s new debit card fee was the last straw for many consumers who are tired of banks that got bailed out that are now turning around and hiking fees,” Norma Garcia, manager of Consumer Union’s financial services program, said in a statement.
Bank of America Drops Plan for Debit Card Fee
By TARA SIEGEL BERNARD
Bank of America said Tuesday that it was abandoning its plan to charge its customers a $5 fee to use their debit cards, just a month after announcing the new fee.
The reversal follows a huge backlash from customers, one of whom collected more than 200,000 signatures urging the bank to rethink its plan.
The bank listened, but only after other large banks had indicated that they would not impose similar fees. Wells Fargo, JPMorgan Chase, SunTrust and Regions Financial have all pulled back on their plans.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer at Bank of America, said in a statement. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
Wells Fargo said Friday that it was canceling a test that would have imposed a $3-a-month charge on debit card holders in Georgia, Nevada, New Mexico, Washington and Oregon. JPMorgan Chase, which was testing a $3-a-month charge, decided it would not impose a stand-alone debit card use fee. And SunTrust and Regions have both said they would no longer charge the fees.
But Bank of America, the nation’s second-largest bank after JPMorgan Chase, took the brunt of the criticism, which came from all corners, including Capitol Hill and the White House. Days after the bank announced that it would charge the fee, President Obama said customers should not be “mistreated” in pursuit of profit, while Vice President Joseph R. Biden Jr. called the move “incredibly tone deaf.”
The debit card fee was supposed to have gone into effect in January.
The new fees were part of efforts by the banks to raise revenue lost elsewhere.
In October, a new rule went into effect that limits the fees banks can levy on merchants every time a consumer uses a debit card to make a purchase. The new limit is expected to cost the banks about $6.6 billion in revenue a year, beginning in 2012, according to Javelin Strategy and Research. That comes on top of another loss, of $5.6 billion, from new rules restricting overdraft fees, which went into effect in July 2010.
But consumers have little sympathy for the banks’ loss of revenue. In fact, consumer groups have called for Saturday to be “Bank Transfer Day,” where customers of big banks move their accounts to community banks and credit unions.
“Bank of America’s new debit card fee was the last straw for many consumers who are tired of banks that got bailed out that are now turning around and hiking fees,” Norma Garcia, manager of Consumer Union’s financial services program, said in a statement.
