Big banks avoiding debit card fees
A customer uses an ATM outside of a Chase bank office on October 13, 2011 in Oakland, California.
In the wake of the outcry from customers and politicians over Bank of America's plan to impose a new fee on its debit card users, the Wall Street Journal reports that "most other big U.S. banks" are avoiding such a move.
J.P. Morgan Chase & Co, which operates Chase bank, has dropped plans to charge customers who make purchases with their debit cards, after testing the concept for over half a year. U.S. Bancorp, Citigroup Inc., PNC Financial Services Group Inc. and KeyCorp are among the banks that have said they won't adopt the fees, the Journal reports.
"Our customers told us it would be a huge source of irritation for them," Citi spokeswoman Catherine Pulley told CNN.
"They actually told us that if we were to charge a fee that they would be discontinuing their accounts or services with us," Nandita Bakshi, head of products at TD Bank said.
Still, some banks have gone ahead with new debit card fees. CNN reports that Wells Fargo recently implemented a $3 monthly fee in five states for people who make purchases with their debit cards.
More from GlobalPost: Bank of America to start charging debit card users $5 a month
Bank of America announced in late September that it planned to start charging customers who use their debit cards for purchases $5 a month. The move was seen as a reaction to the so-called Durbin amendment, part of the financial reform law signed by President Barack Obama, which placed a cap on the fees banks can charge merchants for processing debit cards. The change was projected to disrupt billions in revenue for the banks. Senator Dick Durbin (D-IL), the amendment's namesake, reacted to Bank of America's plan by saying that the bank was "trying to find new ways to pad their profits by sticking it to its customers."
After the Journal story came out on Friday, Reuters reported that Bank of America "is likely to give customers more ways to avoid the [new] fee." An anonymous person "familiar with the bank's plans" told Reuters that many customers could be allowed to avoid the fee by maintaining a minimum balance, having paychecks direct deposited or using Bank of America credit cards.
The story you just read is accessible and free to all because thousands of listeners and readers contribute to our nonprofit newsroom. We go deep to bring you the human-centered international reporting that you know you can trust. To do this work and to do it well, we rely on the support of our listeners. If you appreciated our coverage this year, if there was a story that made you pause or a song that moved you, would you consider making a gift to sustain our work through 2024 and beyond?