Bank of America to drop the $5 debit card fee

[WolfeMacleod]

Guess enough people voted with their wallets. I know I was going to. I went into BOA last week to ask about the new charge and if I would be affected, since I have a business account. When they told me yes I would, I suggested that they should learn a lesson from Netflix, and that I'd be seeking a credit union, and walked out.
I've been with BoA since 1999.

But, they want to charge $11/mo for a savings account unless you have more than $2500 in it...



Nov. 1 (Bloomberg) -- Bank of America Corp., the second- biggest U.S. lender by deposits, abandoned plans to charge $5 a month for debit cards after a nationwide backlash from consumers and lawmakers.

The bank canceled the fee, which would have started in January, after listening “to our customers very closely,” David Darnell, co-chief operating officer, said in a statement today. The lender also cited competitive pressure.

Bank of America reversed course after rivals including JPMorgan Chase & Co. and Wells Fargo & Co. decided against similar charges, leaving the Charlotte, North Carolina-based firm the only U.S. lender among the biggest five with plans to introduce the fee. Citigroup Inc. and U.S. Bancorp had already rejected the idea, while SunTrust Banks Inc. and Regions Financial Corp. eliminated their check-card fees yesterday.

“For a lot of consumers, this was the last straw,” said Jean Ann Fox, director of financial services for the Washington- based Consumer Federation of America. “Banks have been making a lot of changes to accounts, adding fees and raising the minimum balance needed, and consumers were clear that they objected to one more fee.”

Card issuers must seek other ways to replace revenue lost after the U.S. capped fees on debit-card purchases last month at about half the previous level. The limits, mandated by the Dodd- Frank Act, may cut annual revenue by $8 billion at the biggest U.S. banks, according to data compiled by Bloomberg Government.

Bank of America fell 30 cents, or 4.4 percent, to $6.53 at 3:06 p.m. in New York. The shares have dropped 51 percent this year, the worst performance in the Dow Jones Industrial Average.

Big Retail

Some of the largest chain stores backed the cap, and the Arlington, Virginia-based Retail Industry Leaders Association said in a statement today that the trade group plans to push for similar relief on credit cards.

Lenders will “find more subtle ways to make up for this lost revenue, increases that may fly under the radar,” said Bill Hardekopf, chief executive officer of Birmingham, Alabama- based research firm LowCards.com. “Banks may increase existing fees or raise the introductory interest rates on credit cards.”

Bank of America CEO Brian T. Moynihan, 52, had defended Bank of America's plans, saying Oct. 18 that the debit-card fee would encourage customers to use more services with the company so they'd be exempt.

Customers Protest

The charges had fueled demonstrations in Los Angeles and Boston and prompted a Washington woman to collect more than 300,000 petitions in protest. President Barack Obama criticized the moves as “not necessarily fair to consumers” and Representative Brad Miller, a North Carolina Democrat and member of the Financial Services Committee, introduced a bill last month that would make it easier to switch banks.

Last week, Bank of America managers considered adding ways customers could avoid the fee, including setting up direct deposits or using credit cards, said a person with knowledge of the lender's plans. The company dropped the fee entirely after it became clear it was among the only firms that still planned to assess it, the person said.

Bank of America said Sept. 29 it would charge customers who used their debit cards for purchases if they had less than $20,000 in total balances or lacked a mortgage or Merrill Lynch brokerage account, drawing criticism that it would mostly hurt lower-income customers.

“The public backlash over debit-card fees should serve as a big wake-up call to banks that they can't take their customers for granted,” Pamela Banks, senior policy counsel for Consumers Union, the advocacy arm of Consumer Reports magazine, said in a statement.

--With assistance from Laura Marcinek, Dawn Kopecki and Alexis Leondis in New York. Editors: Rick Green, Peter Eichenbaum

[BeyGon]

I went into my BofA a couple weeks ago and pretty much said the same thing, I don't think it worried them that i would take my money and they said the charges would take effect in Feb of next year. Glad to hear they are changing it. I only went to them because they were easy to access when we went to Australia but I probably won't be going there again soon. I kept my account at the small local bank just in case.

[Rick Lee]

I still don't understand how BofA has any customers. Why do people put up with fees and minimum balance requirements? Just use a credit union. I've never paid a fee except the $3 for the one or two cashier's checks I need per year, no min. balance and the best loan rates out there.

[Porsche-O-Phile]

If you think B of A thinks any more of its customers you're sadly mistaken. You are crap to them and they're just going to go back and find a more underhanded way of sticking it to you to get "their" money.

They suck as a financial institution. I had an account with them for exactly three days in graduate school - that's how long it took me to figure out how downright awful they were/are. I've been a credit union or local (maximum of three locations) bank customer ever since and would never, ever get an account with a "big bank" again, regardless of how much they begged or what incentives they offered.

[Zeke]

Wells Fargo is the king of turds to me. But BofA has got to be on its last legs. I say good riddance. I have been with a regional bank for a long time. Credit union too.

The local bank will cash any check any time, never a line more than 2 unless it's like a Friday afternoon or the day after a holiday. Then there's 5.

BofA has lines out the friggen' door.

Why??

[Arizona_928]

i still have a free checking account at wellsfargo. Everytime I go in they try to get me to change it, but I like free.

[UconnTim97]

Originally Posted by Rick Lee

I still don't understand how BofA has any customers. Why do people put up with fees and minimum balance requirements? Just use a credit union. I've never paid a fee except the $3 for the one or two cashier's checks I need per year, no min. balance and the best loan rates out there.

+1. We belong to a fantastic credit union.

[Hugh R]

My CU is fantastic. I see no reason to ever consider a BoA, I uses WF for a safety deposit box.

[wdfifteen]

Originally Posted by Zeke

Wells Fargo is the king of turds to me.

Me too. Went to a regional bank - Wesbanco - and I get great service and a real human being with the power to do something to talk to. Citibank, Wells Fargo, Bank of America and even US Bank are not only too big to fail, they are too big to serve their customers.

[GH85Carrera]

My credit union wants me to use my debit card. They require me to use it several times each month to get 3% interest on my checking account.

[island911]

Originally Posted by WolfeMacleod

...

Nov. 1 (Bloomberg) -- Bank of America Corp.,...

Bank of America CEO Brian T. Moynihan, 52, had defended Bank of America's plans, saying Oct. 18 that the debit-card fee would encourage customers to use more services with the company so they'd be exempt.
..

Because everyone wants a bank with a maze of 'features' to navigate else get stung with petty fees.

I'm thinking that Bank of America should make plans for the firing of idiot CEO's as it would encourage management to use more neurons within the company so they'd be exempt.

[Rick Lee]

That CEO might do well at Netflix. Though I can totally understand banks passing the cost of new legislation right back to the consumers that legislation was supposed to help. That's what you get with career politicians trying legislate away things their voters don't like. Still don't get why anyone uses a bank over a CU. My wife went to quit Chase last week because of their fees, planned to switch over to USAA. The boss at Chase begged her to stay and waived all fees and min. balance requirements to keep her. I've never had to deal with that BS, been with the same CU since I got my first job out of college.