Bank of America to drop plan to charge $5 monthly debit fee
Bank of America bowed to enormous public outrage Tuesday and backtracked on a $5 monthly fee for debit card users -- a move that follows a similar retreat by other large banks and reflects the consumer angst engulfing the industry.
The fee, first announced in September, would have gone into effect in January, but Bank of America "listened to our customers very closely over the last few weeks," co-Chief Operating Officer David Darnell said in a statement.
That concern was echoed in an online petition; a grassroots boycott of commercial banks called "Bank Transfer Day" planned for Saturday; and by members of Occupy Wall Street.
"Big banks have been allowed to do such damage to so many people and to the economy itself," said Occupy Wall Street spokesman Bill Dobbs, calling BoA's concession Tuesday a "pittance."
Banks have been desperate to recoup the billions of dollars lost after federal provisions last year cut into their profits.
But Wells Fargo and JPMorgan Chase had a similar change of heart last week, and abandoned plans to implement a $3 monthly charge for debit card users. Chase is the largest bank in the New York metro area by deposits, with Bank of America at No. 2.
"The $5 fee is symbolic of a lot more -- it's symbolic of the public's great discontent with banking institutes," said Norma Garcia, senior attorney for Consumers Union, the advocacy arm of Consumer Reports.
Some New Yorkers felt vindicated Tuesday.
"If they charged that high, I would have to switch. It's horrible business," said Bank of America customer Manish Sharma, 29, of Park Slope.
It's unclear how many people ditched their bank to avoid the proposed fee. A Research Intelligence Group survey last month found that 30% of U.S. consumers said they'd do so.
Meanwhile, consumers haven't seen the last of new fees. For instance, Citibank in December will begin charging EZ Checking customers $15 whenever their accounts fall below $6,000.
Banks may be looking to come up with other ways to pass on costs, such as hiking up ATM fees for noncustomers, said Claes Bell, banking reporter at Bankrate.com.
"I don't think this is going to be the end of it," Bell said.
(With Amanda Dallas and Marc Beja)
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Fees for some of the Big Apple’s biggest banks
1) JPMorgan Chase: Has fees ranging from $6 to $35 on certain checking accounts when it falls below a monthly minimum balance. Also charges a $34 overdraft fee.
2) Bank of America: May charge monthly service fees on checking accounts from $8.95 to $25, as well as a $35 overdraft fee.
3) Citibank: May charge fees ranging from $8 to $30 a month for certain checking accounts, as well as a $34 overdraft penalty.
4) HSBC: Fees may range from $3 to $50 a month for certain checking accounts. It also has a $35 overdraft fee.