Bank of America abandons plan for debit card fee
Bank of America announced Tuesday that it was dropping its plan to install a $5 monthly fee for using its debit cards after a month of outcry from customers.
The backlash after BofA said in September it would start charging debit card holders the new fee included pledges to cancel accounts and move to credit unions. Protesters have encouraged bank holders to participate in âBank Transfer Dayâ this Saturday and close their bank accounts at large corporations.
Many account holders perceived it was unfair that BofA was proposing a fee to access their own money â as opposed to credit card accounts.
“I’m unemployed and $5 makes a big difference,” Diane Abela, who learned of the bank’s reversal just before heading into a job interview, told WBSTV. “When you’re working on a budget every week, it’s the last thing you need.”
Larger banks such as JPMorgan Chase and Wells Fargo had said they would not follow BofAâs suit after the banks saw the consumer reaction to additional fees.
âFor a lot of consumers, this was the last straw,â Jean Ann Fox, director of financial services for the Washington- based Consumer Federation of America, told Bloomberg News.
BofA had originally said stricter regulation and limits on other revenue sources had forced it to consider the debit card account fee. Last month, the federal government cut the amount of money that banks could earn from debit card purchase fees.
The bankâs backtracking reflects movie giant Netflix after it decided to forego its separate DVD-by-mail program, which would have been an additional cost for consumers. Netflix is estimated to have lost about 800,000 subscribers since the announced plan.