Chase joins U.S. Bancorp, Citigroup, PNC, KeyCorp and other large banks that have recently moved away from the plan to charge consumers a monthly fee when they use their debit cards to make purchases, reports the Wall Street Journal. The bank recently tested the fee in both Washington and Georgia.
The rationale for the fee comes from a provision in last year’s financial-overhaul law that reduced the amount that banks are permitted to charge merchants for debit-card transactions. Small businesses and other merchants complained that the fees were too high, especially for small purchases.
The new debit card fee has caused outrage among politicians and consumer groups, including Consumers Union, the advocacy-arm of our beloved and generous parent company, Consumer Reports.
They commended Chase for its decision and reiterated its call on Bank of America to end its plan to charge a $5 debit card fee beginning in 2012.
“Consumers Union has heard from thousands of consumers across the country who are outraged that Bank of America is instituting the $5 monthly debit card fee,” said Norma Garcia, manager of Consumers Union’s financial services program.
“Its time for Bank of America to listen to its customers who are saying loud and clear: drop the fee or we’ll drop you. All banks that are considering debit card fees should ditch those plans.”
Consumers Union is also asking readers to make their own “Bank Break-Up” videos and submit them.
JPMorgan Chase won’t charge debit card fee as big banks back away [Chicago Tribune]