Battered Bank of America Drops Debit Card Fee Plan
Is Occupy Wall Street working? Bank of America (BAC) announced on Tuesday that it's dropping its plan to charge a $5 monthly fee to customers who use debit cards for purchases.
"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 of the bank said in a statement on Tuesday. "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."
Since the Bank of America announced the $5 monthly fee on Sept. 28, some customers fled the bank, saying it was one fee too many. The financial institution said it does not break out numbers for total accounts closed by the month, a spokesperson said.
Other banks that had instituted a debit-card fee or were testing the idea of debit-card fees have also dropped their plans as well.
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For Bank of America, the damage could already have been done.
"By claiming that it has 'listened' to customers and discontinued the fee, it only raises the question: Why didn't they ask customers about the fee before implementing it?" said Ron Shevlin, senior retail bank analyst with the Aite Group. "In addition, the bank will be seen as nickel-and-diming their customers, and not very decisive about how to run its business."
Bank of America notes that no new fees were actually charged. Everyone who might have come under the revised fee structure in January 2012 will now continue to be able to use their debit-card at no extra charge.
CEO Brian Moynihan had defended the fee as part of a strategy to make up for lost revenue after swipe fees were capped as part of financial reform legislation -- specifically, the Durbin Amendment which curbed the bank's income from card use. A spokesperson declined to say what other new revenue streams the bank might try to tap in the future, saying only that the bank will "continue to initiate actions to mitigate revenue loss."
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