A month after Bank of America got pummeled by consumers and lawmakers for introducing a monthly debit-card fee, other big banks are backing off plans to charge customers for using their debit cards.
JPMorgan Chase has decided not to charge customers to use their debit cards, according to a source with knowledge of the plans but who isn't authorized to discuss the matter.
Wells Fargo also announced late Friday that it has cancelled plans to test a debit card fee in five states. "Wells Fargo remains committed to helping our customers succeed financially and we believe this decision is in the best interest of our customers," a Well Fargo spokesperson said.
In February, Chase launched a pilot program that charged customers in Georgia and Wisconsin a $3 monthly debit card fee. The program will expire in November and Chase doesn't plan to extend it, according to the source.
Consumers Union applauded the decision and called on Bank of America to rescind its plans to start charging customers a $5 monthly debit card fee, starting in 2012.
"Consumers Union has heard from thousands of consumers across the country who are outraged that Bank of America is instituting the $5 monthly debit card fee," said Norma Garcia, manager of Consumers Union's financial services program.
"We always take into consideration feedback we receive from our customers," a Bank of America spokesperson said in response, "and are committed to being clear and transparent about our fees so that customers understand their options in paying for services and ways they can avoid fees."
Starting in November, SunTrust, a major regional bank, will charge customers a $5 monthly debit card fee. Regions Financial, based in Birmingham, Ala., has also added a $4 monthly debit card fee. Wells Fargo is testing a $3 monthly fee in some of its markets.
Banks that have raised their fees said a regulation that took effect Oct. 1 left them with no other choice. That regulation cut in half the fees financial institutions can charge retailers whenever consumers use their debit cards for purchases. The regulation exempted banks and credit unions with assets of less than $10 billion.
But other big banks have made of a point of publicizing the fact that they don't charge a debit card fee. Citibank earlier said it decided not to charge a debit card fee because customers made it clear that they didn't want to pay for the convenience of using their cards. TD Bank put out a press release Friday stating that it will continue to offer its customers debit cards with no monthly fee.
TD Bank said a survey of its customers revealed that 70% would discontinue their account if the bank charged a debit card fee.
Most small banks and credit unions don't charge debit card fees. In an effort to attract new deposits, some of those institutions have launched advertising campaigns urging angry customers of big banks to switch accounts.
A grassroots effort on Facebook has designated Nov. 5 "Bank Transfer Day" and is encouraging consumers who are unhappy with new bank fees to move their accounts to credit unions or community banks.
by Sandra Block USA Today Oct. 28, 2011 04:25 PM
Chase, Wells Fargo drop plan to charge fee for debit cards
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