If you ever doubted the power of consumers to make a big difference – this should change your mind.
About one month ago, Bank of America announced plans to start charging customers $5 a month if they used their debit cards in 2012.
The fee was in response to new federal regulations limiting the money major banks receive from swipe fees, which are charged to merchants every time a debit transaction is processed. Many banks turned to consumers to make up the lost revenue in the form of new and higher fees, but Bank of America’s $5 debit card fee caused by far the biggest uproar.
Now BofA is looking to compromise a bit. It does not plan to do away with the $5 fee, but it does plan to make it easier for people to avoid it.
The exact details of how the $5 fee can be avoided are not yet clear. However, a spokesperson for the financial institution indicated that measures such as keeping a certain minimum balance, having direct deposits connected to a checking account and using a BofA credit card would likely be loopholes.
IMPORTANT UPDATE: As of November 1st, Bank of America has completely reversed course on its plans for a $5 debit card fee as have other banks including SunTrust out of Atlanta and Regions Bank. BofA customers no longer have to worry about a debit card fee in 2012.
BofA's Brian Moynihan
The criticism against Bank of America following it’s initial announcement of the debit card fee was impressive to say the least.
When CEO Brian Moynihan expressed that his bank had a right to earn a profit it only added fuel to the fire.
The firestorm of disgust included many Americans who were fed up by the fact that BofA was bailed out during the financial crisis, and had been accused of shady practices regarding mortgages and more.
Bank of America is far from a beloved company. In fact, it took second place in the Consumerist.com reader survey to crown The Worst Company in America. The corporation that won the official title was BP – after being blamed for the massive oil spill in the Gulf Coast this year.
Just today, the Consumers Union issued a statement urging Bank of America to completely eliminate the $5 debit card fee.
“It’s 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.”
And guess what? Some banks really are dropping plans for debit card fees.
JP Morgan Chase had been testing out a $3 debit card fee in parts of the country. However, it has decided to end the program without extending or expanding it. Coincidence? Or did the angry outcry of consumer voices directed at Bank of America play a role in this decision?
Other major banks including CitiGroup, U.S. Bank and PNC Financial also announced they decided against introducing debit card fees.
Wells Fargo has been testing a $3 debit card fee, but has yet to make a decision on whether it will be widespread and permanent.
Bank Transfer Day logo
Bank of America’s debit card fee was likely partly responsible for an online movement encouraging people to transfer their money out of major banks and into community credit unions before November 5th.
Bank Transfer Day has attracted tens of thousands of upset consumers. While it bears resemblance to current “Occupy” protests going on around the country, the event’s organizer Kristen Christian says the two are not affiliated.
At thist time, no one associated with Bank Transfer Day has officially responded to the news from BofA. However, in response to news that some major banks were not implementing the debit fee, a posting on the Facebook wall indicated it was “too little, too late.”
What’s Your Opinion?
Do you think this is a victory for consumers, or is there still a long fight ahead?
If you are a current Bank of America customer, is this enough to satisfy you?
Leave a comment and let us know! Plus, check out a video from Consumer’s Union below featuring BofA customers breaking up with their bank.
If you still plan on leaving your current bank for a credit union, here’s an article on how to switch banks.
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Bank Transfer Day logo credit: Eddie Colla
+Kasey Steinbrinck writes regularly on personal finances and the U.S. economy for Check Advantage. Visit them today and view their most popular checks including a big collection of Dog Checks and Christian Checks. Contact Kasey to request free content for your website or blog.
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