Bank of America Backlash Makes Banks Rethink Monthly Debit Card Fees
Anger towards big banks has been festering for some time now, but things really boiled over last month when Bank of America announced that they were going to be levying a $5 per month fee on customers who use their BofA debit cards to make purchases.
The response from customers was immediate. Many felt as though a bank charging its loyal customers a monthly fee to spend their own money was borderline criminal. Others felt that the move was a slap in the face after US taxpayers bailed the banks out during the financial meltdown.
It wasn't just Bank of America that was planning on imposing a monthly fee on debit cards used for purchases. Other banks, including JP Morgan Chase and Co. and Wells Fargo and Co., had been testing monthly fees for debit card use in select markets as well.
After the massive outcry against Bank of America, a number of banks have announced that they are scrapping their monthly debit card fee test programs. According to the Associated Press, JP Morgan Chase and Co. will stop charging $3 per month when its test pilot ends in November. On Friday, Wells Fargo and Co. announced that they would be ending their program as well.
Other banks, including US Bancorp, Citigroup, PNC Financial Services Group Inc. and KeyCorp, have also announced in recent days that they will not be entertaining the possibility of imposing monthly fees on debit card use.
Even Bank of America seems to be back-tracking somewhat, as they are now saying that the $5/month fee will likely not impact all of its customers.
Banks have been looking to come up with new revenue sources after the implementation of the Dodd-Frank financial-overhaul law reduced the amount of money that banks were able to charge merchants for debit-card transactions. The new debit-card fees were seen as a solution, but plans to implement the new fee have come to a crashing halt at many banks across the nation.
As of yet, none of the banks who have backed away from the fees have cited Bank of America's troubles as the reason why they decided to nix the idea.
You can be certain that practically every major bank in the nation would have eventually implemented a similar monthly fee if there hadn't been such a strong backlash against Bank of America.
Source: WSJ.com - Big Banks Blink on New Card Fees
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