In a dramatic reversal, Bank of American has canceled its plans to impose a monthly fee for debit card use, according to The New York Times.
Several of the country’s largest banks announced they would impose these types of fees for every month in which customers use their debit card as a means to recoupe losses imposed by the recent Dodd-Frank Wall Street Reform and Consumer Protection Act. One part of the law reduced the maximum fees allowed for debit cards, ultimately cutting those revenues roughly in half and depriving banks of billions in steady revenue.
Banks had been insistent that they needed to raise revenue somewhere and the debit card fees seemed the simplest and most equitable means of accomplishing this. However, with countless customers expressing their outrage at the decision and many actually taking the next step to switch to local banks or credit unions, both Wells Fargo and JPMorgan Chase backed away from the decision over the last weekend of October.
After a similar announcement came from regional banking giant SunTrust, Bank of America had little choice but to concede.
Despite the recent efforts to stem the losses, the Santa Cruz Sentinel reports that thousands of customers have fled to local credit unions in the lead up to the so-called “Bank Transfer Day” on November 5. One credit union reported nearly 100 percent growth in new accounts since the decision.