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Alan Diaz / AP
Customers stand in line at a Bank of America ATM.
Bank of America said Tuesday it is dropping its heavily criticized plan to charge customers $5 a month for making purchases with their debit cards.
The nation's second-biggest bank made the announcement in a brief news release posted on its website.
"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, said in the statement. "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."
Bank of America triggered widespread outrage with its announcement in late September that it would begin charging some customers a monthly fee for debit card use beginning Jan. 1. While other banks were testing the fees, Bank of America took a leading role in trying to assess the fees to recoup revenues being lost due to new federal limits on "swipe fees" charged to merchants that went into effect Oct. 1.
The debit card fees would have been waived for customers who had large balances or "premium accounts," a factor that only stoked outrage in an atmosphere where Occupy Wall Street protesters across the nation have been railing in favor of the "99 percent" and against the top 1 percent of earners.
In recent days Bank of America tried to soften its stance on debit card fees, suggesting that more customers would be eligible for a waiver. But as rivals such as Wells Fargo, SunTrust and Regions ended tests or nixed plans for debit card fees, Bank of America was left virtually alone in its effort to charge for debit card fees.
A groundswell of opposition led many people to urge customers to switch to credit unions or banks that were not imposing heavy fees, culminating in "Bank Transfer Day," which is set for this Saturday.
Bank of America's announcement Tuesday sparked an outburst of satisfied comments in the Twittersphere, with one commenting that "The only thing shorter than Kim Kardashian's marriage was Bank of America's credit card fees."
Others gave credit to the Occupy Wall Street movement for forcing Bank of America's hand, although the outrage against debit card fees was even broader than the multicity protest movement.
Bill Hardekopf, CEO of LowCards.com, cautioned that banks would find other ways to make up for the billions in revenue they are losing due to the swipe-fee limits.
"They will find more subtle ways to make up for this lost revenue, increases that may fly under the radar," he said. "Banks may increase existing fees or raise the introductory interest rates on credit cards. They will find some way to increase their revenue, and it's always the consumer that will end up paying for these increases."
Related:
Some big banks back down on debit card fees
Why banks want to wean you off debit cards
Leave a Comment:
Too bad they've already lost millions of dollars just from people leaving them in droves. At least they set the example for how banks shouldn't act.
Here that Regions Bank! Drop your $4 month fee on debit card transactions that is ALREADY in effect, or we all switch to BOA!
Why anyone still has their money in the big banks with old credit unions, online, and small local banks around amazes me! They screw us over AFTER we bail them out and we still do business with them? Suckers.
It is time that we consumers show all of BIG business just what a free market can do and give them all Netflix Moments!
Shop local and small!
Oh...just saw that Regions Bank has dropped the $4 monthly fee and is actually refunding customer accounts that were already charged. Way to listen to your customers!
A little to late to change their mind. The damage is done. BOA will find another way to collect fees. Get out of big banks while you can. Their are plenty of options.
They are still a-holes. I am sure the credit unions and community banks are thanking them for being morons.
Yeah, funny how bad press leads to action that common sense could have corrected in the first place. Believe me, they knew they were going to get kick back on this, they just planned on the $5 fee canceling it out and still making them a profit. Instead they found out they'd lose money so they scrapped the idea. "Our customers voices are important to us." Notice they attached "voices" to "customers" in that statement. It's those "voices" told them they'd lose money, and that's the only thing that's important to them.
Oh, and they'll still find another way to squeeze money out of their customers. Next time they'll just hide it in some fine print.
Don't let their so called goodwill fool you. Leave them now if you have the option. Shut them down for good.
Its incredible how financial institutions who got caught with their hand in the cookie jar, feel entitled to the money they have been stealing from consumers (swipe fees charging the vendor; is charging the consumer) . This is all somehow the fault of as Republicans coin it... 'job killing regulations'. I hope we don't all develop amnesia and are able to send the 112th Congress just as strong a message, that if they do not support what is best for America they will be booted out of office. That goes for all flavors of Democrats & Tea/Pubs.
I think in the future screwing your business out of customers by trying to grab a few extra bucks will be refered to as "Netflixing"
"Geez, why did we try that price increase - we just Netflixed our selves on that one"
"Better not raise prices this year boys or we might just Netflix ourselves out of a job"
"David Darnell, co-chief operating officer, said in the statement. "Our customers' voices are most important to us."
Really? So thats why when a legal change cut your profits you moved the burden directly to your customers... until it became clear that was going to cost you too much in lost customers?
Your profits are most important, stop insulting us by pretending otherwise.
Funny, cause last month in response to Obama's comments about this issue, David Darnell said "our company has the right to make money" His customer's weren't that important to him then, why now? I closed my account and moved over to the credit union.
Best financial move I made.
The Fed won't be happy until the banks are out of business. Let them charge the stupid swipe fees. Retailers make it up in the prices charged for goods sold and for not having to handle cash, checks, or credit card processing fees. The banks have to pay for the cost of offering the cards and the service somehow.
First our Federal Government forces banks to make bad loans with the revisions to the Community Reinvestment Act, practically destroying the banking industry in the process due to our GOVERNMENT'S incompetence. Now they are messing with the profitability of the banks, hurting them further. People, you need to get to the polls and vote the idiots in Washington DC out, starting with Dodd, Frank, Pelosi, and Reid. Enough is enough.
Alan they do make money, they use your money to make loans and then recup the money plus some. Plus the have all these other fees anyway.
Banks were never suppose to report billions in profits, that is why the law limited them to how they could expand but when deregualted and mergered with their invesment banking brothers and their eexotic morgages bundles that is what cost this nation trillions deregualtion
I am sure they will just find other ways to screw their customers and the taxpayers.
Look at the trillions of dollars in junk derivatives the Fed just allowed them to dump on the FDIC. The FDIC will be forced to cover their gambling debts and when the FDIC needs a bailout they will come right to the taxpayers
Why anyone uses Bank of America is beyond me, they are truly the limit.
I've actualy been very pleased with them over the years. No complaints - but I was getting a little tired of fees. If they had not changed their tune - I would have shopped for another, less convenient (driving to and online usage) bank with lower or no fees.
I am happy I waited and that they backed down and I get to stay where I am.....
@ Mrs.M ... I agree. In fact, up until this morning, my wife and I were shopping for a new bank for both our accounts. Had they not dropped the fee, we would have dropped BoA. Having said that, we weren't looking forward to it. Would have had to change our direct deposit with our employers. We then would have had to change our cards. Then it would be time to change all of our online bill paying. In short, a major hassle, but one we were fully prepared to undertake.
For the most part, they have been good to work with and I have known the local branch manager since grade school so I'm glad they changed their tune.
I prefer not to do business with BOA, unfortunately they bought my mortgage from the community bank I used. Sometimes, you just can't avoid the sharks by swimming in a smaller pool.
If you continue to do business with BOA knowing what they are doing because you are too lazy to put in the effort to change banks, you deserve what you are getting. Get smart and use a local bank. There's plenty that would love to have your business.
Time for the CEO to step down at BoA and receive his golden parachute before they crash.
I'm thinking it's too little too late I can't count on both hands and feet the amount of my friends and family members that left, so I can only imagine how many others did too, personally I don't know why anyone would bank with the likes of them anyway. USAA will always be the only bank for me.
I cancelled my account with those crooks last week and now I convince my wife to shut her 2 accounts she has with them, she will shut this week, so long bank of crooks, we are going to a credit union
Too little, too late. They no longer have my money, and the local credit union does. Good riddance, as far as I'm concerned.
They Dropped the charge because they have found another way to swindle you out of your money. Please believe me, we going to pay them one way or the other.
Then why not switch banks or join a CU?
I never pay a fee to access my money. My checking is free with PNC bank and I pay off all my cards each month.
It's a simple matter of trust! I was planning on closing all of my accounts out of BoA before the new fees kicked in. But if they think I'm staying there now that they have discarded the fees, they have another thing coming! The last three years BoA has shown what they are all about and I have lost all trust in them. I know that they will just try to squeeze the money out of me some other way! I already have the accounts open at my local CU and just need to switch over the automatic depoits and payments and they are a done deal on my books! What's sad is I have a 23 year old account with them that will be closed as well! I just don't trust them anymore!
OWS it right. The people can effect change if they stick together with an achievable goal. This one may be small but it is a beginning. Congratulations to all of those who moved their accounts.
No reason to stop jumping ship. They only have their interests at heart. They don't deserve your business.
If people continue jumping ship, they'll be drooling all over themselves to restructure their business operations to be more appealing to customers. Of course, they'll probably lay off tellers and close some branches first to recoup their losses, because that's the way businesses operate. Fortunately, those tellers can find jobs at community banks and credit unions because that's where the customers are going!
Oops! Too late! I already moved ...
Oh what losing customers not the ideal way to run a banking business?
It's too bad the banks can't remember how to make money off interest rates on loans and safe investments via deposits made with the bank instead of screwing their customers over with absurd fees that are entirely without merit now that everything is done electronically.
I hope the word doesn't spread too fast on them back tracking on their decisions so they continue to lose accounts.
Our deposits in banks today are worthless to banksters. Don't believe me? Don Sturm, the owner of American National Bank, was quoted on Sunday's NY Times when asked about checking and savings deposits: "We just don't need it anymore. If you had more money than you knew what to do with, would you want more?" FDIC-insured accounts are being overrun with cash taken out of risky investments, and there's still no stomach for lending among banksters since the 2008 recession. So that's where we sit, in a standoff of no confidence. It's going to be years before we can get back to normal business after the mortgage-lending defaults and mass layoffs.
Remember the good old days, when banks made enough money off the money you had deposited in your saving accounts, and loans, etc? Maybe the billionaires at the top of the company will have to take a pay cut now.
Pffffft... Pay cut? That will never happen. As mentioned in the article, they will find more subtle ways to get $$ from their "customers." These guys don't get paid boat loads of green because they are great people with awesome educations. They rake in the cash because they know how to squeeze $$ out of their "customers." This is just the diversionary tactic to take your attention off of your flank... BoA is saying "look, we are so thoughtful and caring," while digging a hole behind you to push you in.
Score one for the good guys!
Already moved my direct deposit and automatic payments. Just waiting for the last couple of items to clear and I'm cancelling my acccount also. They WILL find another fee to impose on their customers instead. Its only a matter of time.
Count me as another dissatisfied customer who left the Bank Of @!$%#s for my local CU. This after 30 years
Time to get your money out while you still can.
One more coffin nail in for the era of greed. Now if only they 'listened to the people' and realized modified home loans are more profitable in the long run than foreclosure. And it just goes to show, you can have an MBA from Harvard and still not have the common sense of a five year old. I hate to say this, but deregulating the banks was the biggest mistake this country ever made. "The market" did not keep them in line.
Don't celebrate yet. Banks don't lose money. They just shift the cost somewhere else. My bank just started charging a penalty fee for the use of overdraft protection which makes it totally useless. The whole purpose of overdraft protection is so that you don't get hammered when you accidentally overdraw your checking account.
I hope you take the high ground and leave your bank behind. If enough people move their accounts change will happen. This is proof of concept.
They, banks in general, make millions of dollars in profit, take your $ and loan it out while paying you a pittance, and then CHARGE you to use your $. What a racket! Just a legal Ponzi scheme.
Heeheehee.....BOA is laughing. They got the sheep thinking they have won. Guess what? The cost of getting a loan just went up, as well as the cost of a safe deposit box. Closing cost for loans also just went up. Interest earned on savings acccounts just dropped. Interest-bearing checking is getting less interest. Credit card interest and fees just went up. Free checks? No more.
None of that will matter if you do no business with them. That's the idea behind moving your accounts and that's why this token gesture must be ignored. Businesses can suffer and die if their customers step up and boycott them. It can be done.
JobSeeker, I understand your "domino" effect, but I think in the end that only hurts the competitiveness of said bank. To me, that only forces people to move to better opportunities, such as credit unions. In this day, EVERYTHING is bad unless you're rich. With that being said, people are forced to try and cut corners, to try and make their welfare better off like it USED to be. We don't have the luxury of just complaining with no action. With pressures of high gas for 3 yrs running, extra high groceries (due to said gas), mortgage collapse, labor market collapse, no pay raises (not even cost of living increases), and very high unemployment with many out of jobs for a year or more, a new discrimination of out-of-work and under-employed people, our backs are up against the wall. These are Perfect Storm times, if you ask me.
Cheers
Which is exactly why I switched to a credit union 10 years ago.
If BoA wants to price itself out of being competitive, that's BoA's problem. I won't do business with them.
Wake up folks, you 99 percenters, you want real change? STOP doing business with corporations altogether, you want jobs? make sure the money you spend stays in your community. avoid walmart or any national chain. most communities have a locally owner supermarket, use it. buy only american cars that are made in the us. DO NOT buy any chinese goods. and first and formost give the finger to large banks and use small local credit unions. but beware of boeing employees credit union, their not small and dont have any community ties. most towns near farming have ethanol refiners, buy ethanol e85 to run in your car, nascar is using it to power their 800 hp race cars, why not yours. do all this and you'll will have run the walmarts and BofA's out of business or better yet, to china and we'll slowly buy back our 14 trillion in treasury bonds from china, japan and the large banks that now own us.
This is true. Any 99%'ers who are still doing business with the same people they claim to be against are hypocrites and they're just wanting a handout. People who want real change will be willing to work for that change, not just stomp their feet.
You've got to be kidding me. B.E.C.U. is phucking amazing!!!! I've been with them 5 years now and having nothing to say but good things.
I've NEVER had one bad experience with them and they have always gone out of the way to make me happy. I get a crap ton of interest on my checking and savings account, way more than a C.D. and I've NEVER been charged a single fee from them. NEVER!
B.E.C.U. WILL FOREVER HAVE MY MONEY IF THEY CONTINUE THEIR STELLAR SERVICE!!!
Too late.... already opened accounts at a credit union and went through the effort to switch all bills and direct deposits over to new accounts. Just a matter of walking in to BofA and closing accounts with them. Not going to change my mind. They threw the gauntlet down, I'm just swinging it!