NEW YORK – Bank of America Corp. is scrapping its plan to charge a $5 monthly fee for debit card purchases after outraged customers threatened an exodus.
The about-face comes as customers across the country petitioned the bank and mobilized to close their accounts in favor of credit unions and community banks. The outcry prompted other major banks, including JPMorgan Chase & Co. and Wells Fargo & Co., to cancel trial tests of their own debit card fees.
Bank of America, the nation's second largest bank, said it reversed course after listening to an outcry from customers. Anne Pace, a spokeswoman for Bank of America, declined to say whether there was a spike in account closures following the September announcement that it would start charging the fee early next year.
Higher fees have become a fact of life for bank customers in recent years. But this one touched a nerve because it hit so close to home; many Americans have come to rely on debit cards to manage essential expenses such as groceries and gas.
At the same time, there's still lingering resentment over the role that banks played in the 2008 financial meltdown and the ongoing home foreclosure crisis. That anger has come to surface in recent weeks with the Occupy Wall Street movement.
The banks have countered by saying that efforts in the past two years to regulate the industry have forced them to raise or introduce new fees to stay profitable. That made the march to higher fees seem almost inevitable — and makes the rare victory by consumers in this case even more remarkable.
"When I heard about the fee, it was the last straw for me," said Molly Katchpole, a 22-year-old nanny whose online petition urging Bank of America to drop the debit fee captured more than 300,000 signatures. "I'm living paycheck to paycheck and one more fee was just too much."
Katchpole said she already closed her account and moved her money to a community bank in Washington, D.C. For her, the damage has been done. She said Bank of America's decision won't win her back.
It's still too early to say whether the bank's gross miscalculation of consumer sentiment will have a lasting impact. But Bank of America is also dealing with a host of other troubles, including the potential for large mortgage-related settlements to drain its capital and plans to cut 30,000 jobs to reduce expenses. Last quarter, the company lost its standing as the nation's largest bank by deposits to Chase.
The news of the debit card fee meanwhile drew criticism from even President Barack Obama and sparked a movement called "Bank Transfer Day" that urged customers to close their accounts by this Saturday.
"This is Bank of America's Netflix moment," said Mark Schwanhausser, a banking analyst with Javelin Strategy & Research. "It misjudged what consumers would bear. It was the wrong fee at the wrong time." The bank's actions echo the reversal of Netflix to split its DVD-by-mail and streaming video services after vehement consumer complaints.
The uproar over a potential debit card fee was particularly strong because it's fundamentally a fee for customers to access their own cash at a time when consumers are trying to cut back on borrowing, he said.
Diane Abela, a 38-year-old Manhattan resident, said she had been waiting to see if Bank of America would back down on its plan before closing her account.
"I'm unemployed and $5 makes a big difference," said Abela, who learned of the bank's reversal just before heading into a job interview. "When you're working on a budget every week, it's the last thing you need."
Unlike Chase and Wells Fargo, Bank of America's announcement that it would start charging customers a monthly debit card fee came without any testing in the marketplace.
Pace, Bank of America's spokeswoman, said the decision to roll out the fee was instead based on internal customer surveys. She declined to detail the nature of those surveys but said that in the past couple of weeks "customer sentiment changed."
The high-profile retreat could signal that the specter of a debit card fee has been extinguished for the time being. But it doesn't mean customers won't continue to see higher fees elsewhere.
This past spring, for example, Bank of America raised the monthly fee on its basic checking account to $12, from $8.95. The Charlotte, N.C.-based bank is also testing a new menu of checking accounts with monthly fees ranging from $6 to $25 in select states. Pace said the pilot program is getting good results and that the bank plans to move ahead with its rollout sometime next year.
Other, smaller fees may be nicking away at customer accounts as well. In September, the bank instituted a $5 fee to replace debit cards, with overnight rush delivery costing $20. Both services had previously been free.
Chase and Citi also hiked fees on their basic checking accounts this year, to $12 and $10, respectively. Chase said it will end a test in Georgia of a basic checking account that charged an even higher $15 monthly fee, however.
And like many other banks, Wells Fargo ended its debit rewards program earlier this year.
In rolling out such unwelcome changes, banks have largely blamed a new federal regulation championed by Senator Dick Durbin of Illinois. The law, which went into effect last month, caps the amount banks can charge merchants whenever customers swipe their debit cards.
JPMorgan has said it would lose $300 million each quarter as a result of the regulation; Wells Fargo said it would lose $250 million a quarter.
For now, Bank of America said it doesn't have any new fee hikes in the works to make up the lost revenue. "We will continue to initiate moves that mitigate loss revenue," Pace said. She added that the bank will also introduce products that "bring us more business from customers and reward them for doing so."
Keywords clouds text link http://alonhatro.com/
|aviatorsgame.com ban nhạc||confirmationbiased.com|
|mariankihogo.com ốp lưng||Giường ngủ triệu gia Ku bet ku casino|
mặt nạ mặt nạ ngủ Mặt nạ môi mặt nạ bùn mặt nạ kem mặt nạ bột mặt nạ tẩy tế bào chết mặt nạ đất sét mặt nạ giấy mặt nạ dưỡng mặt nạ đắp mặt mặt nạ trị mụn
mặt nạ tế bào gốc mặt nạ trị nám tem chống giả
© 2020 US News. All Rights Reserved.