Bank of America is calling off its plan to charge debit-card users $5 a month, the WSJ reports.
“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, Bank of America’s co-chief operating officer said in a statement. “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
The WSJ says that they spoke with “a person familiar with the matter,” and that the rewind was spurred by “negative customer feedback.” Unlike how it usually goes in the banking industry, other banks did not move together with Bank of America to put the fee hike into practice. Just a few days ago, Chase dropped plans to test out a $3 monthly debit card fee. And in recent weeks U.S. Bancorp, Citigroup, PNC, SunTrust, and Key Corp all retreated from plans to assess monthly fees on customers who used their debit cards.
In that void, the voice of CEO Brian Moynihan proclaiming that the bank had a “right to make a profit” sounded awfully tinny. The Bankers Association made that solo a duet with the grammatically disturbing statement, “We don’t expect to pay nothing to ride the train.” But the other banks didn’t want to join in and make it a chorus. Bank of America was then left out on a limb all by its lonesome, and subject to pressure from government officials, their own customers, and by advocacy groups.
For example, Consumerist’s publisher, Consumer Union, called on BofA to end the fee, and encouraged consumers through their DefendYourDollars blog to make videos capturing their Bank of America “break-up” speeches on video.
“Consumers have the power to make the big banks back down from unfair practices if they raise their voices and vote with their feet and their dollars,” said Norma Garcia, manager of Consumers Union’s financial services program. “In the end, Bank of America understood that it risked losing too many valuable customers by charging an unfair debit card fee.”
“The public backlash over debit card fees should serve as a big wake up call to banks that they can’t arrogantly take their customers for granted,” said Pamela Banks, senior policy counsel for Consumers Union. “While banks may come back with other fees in the future, they’ll be gauging public reaction carefully.”
Even with their hides singed, you can bet that big banks will keep looking for ways to recoup revenue lost from recently implemented swipe-fee reform. If it’s not this fee, it’s going to be another. Why wait for the inevitable? Participate in the November 5th “Bank Transfer Day” and switch to a lower cost local or regional credit union or community bank. Here’s helpful instructions for making the switch easier.
How did Bank of America come up with $5 as the fee to charge anyway? Here’s an explainer.