See, only a matter of time.

 

http://news.businessweek.com/article.asp?documentKey=1376-LTZNE56S972801-1G39RVCS3H25263PV60K7617UO

 

 

Bank of America Backs Off From Plan to Charge Debit-Card Fee

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(Updates with shares in the sixth paragraph.)

 

Nov. 1 (Bloomberg) -- Bank of America Corp., the second- biggest U.S. lender by deposits, abandoned plans to charge $5 a month for debit cards after a nationwide backlash from consumers and lawmakers.

 

The bank canceled the fee, which would have started in January, after listening “to our customers very closely,” David Darnell, co-chief operating officer, said in a statement today. The lender also cited competitive pressure.

 

Bank of America reversed course after rivals including JPMorgan Chase & Co. and Wells Fargo & Co. decided against similar charges, leaving the Charlotte, North Carolina-based firm the only U.S. lender among the biggest five with plans to introduce the fee. Citigroup Inc. and U.S. Bancorp had already rejected the idea, while SunTrust Banks Inc. and Regions Financial Corp. eliminated their check-card fees yesterday.

 

“For a lot of consumers, this was the last straw,” said Jean Ann Fox, director of financial services for the Washington- based Consumer Federation of America. “Banks have been making a lot of changes to accounts, adding fees and raising the minimum balance needed, and consumers were clear that they objected to one more fee.”

 

Card issuers must seek other ways to replace revenue lost after the U.S. capped fees on debit-card purchases last month at about half the previous level. The limits, mandated by the Dodd- Frank Act, may cut annual revenue by $8 billion at the biggest U.S. banks, according to data compiled by Bloomberg Government.

 

Bank of America fell 30 cents, or 4.4 percent, to $6.53 at 3:06 p.m. in New York. The shares have dropped 51 percent this year, the worst performance in the Dow Jones Industrial Average.

 

Big Retail

 

Some of the largest chain stores backed the cap, and the Arlington, Virginia-based Retail Industry Leaders Association said in a statement today that the trade group plans to push for similar relief on credit cards.

 

Lenders will “find more subtle ways to make up for this lost revenue, increases that may fly under the radar,” said Bill Hardekopf, chief executive officer of Birmingham, Alabama- based research firm LowCards.com. “Banks may increase existing fees or raise the introductory interest rates on credit cards.”

 

Bank of America CEO Brian T. Moynihan, 52, had defended Bank of America's plans, saying Oct. 18 that the debit-card fee would encourage customers to use more services with the company so they'd be exempt.

 

Customers Protest

 

The charges had fueled demonstrations in Los Angeles and Boston and prompted a Washington woman to collect more than 300,000 petitions in protest. President Barack Obama criticized the moves as “not necessarily fair to consumers” and Representative Brad Miller, a North Carolina Democrat and member of the Financial Services Committee, introduced a bill last month that would make it easier to switch banks.

 

Last week, Bank of America managers considered adding ways customers could avoid the fee, including setting up direct deposits or using credit cards, said a person with knowledge of the lender's plans. The company dropped the fee entirely after it became clear it was among the only firms that still planned to assess it, the person said.

 

Bank of America said Sept. 29 it would charge customers who used their debit cards for purchases if they had less than $20,000 in total balances or lacked a mortgage or Merrill Lynch brokerage account, drawing criticism that it would mostly hurt lower-income customers.

 

“The public backlash over debit-card fees should serve as a big wake-up call to banks that they can't take their customers for granted,” Pamela Banks, senior policy counsel for Consumers Union, the advocacy arm of Consumer Reports magazine, said in a statement.

 

--With assistance from Laura Marcinek, Dawn Kopecki and Alexis Leondis in New York. Editors: Rick Green, Peter Eichenbaum

Saw this on the news last night, 3 banks all reniged on the charges..

 

They cannot afford to lose the customers.

Don't worry. They will find a way to get their money. It will just be sneakier next time.

Don't worry. They will find a way to get their money. It will just be sneakier next time.

 

Yup, they'll find a way.

As was said, it may not be this idea, but the changes that banks had to comply with will be made up someplace else, maybe not in one area like they were trying, but is will be made up someplace.

I am fairly certain the fees will be passed onto the merchants.

Wonder how many customers they lost?

I am fairly certain the fees will be passed onto the merchants.

 

This. I was just stopped in at my local FFL and they told me that they had to start charging 3% to all credit card transactions, and soon will be charging the same on debit. They said that they can't cover the processing fees anymore.

F-em. Write a check for cash at the bank and only pay with cash. This is the way it was done in the olden day's back in the early 80's. I remember if you couldn't get to the bank on Friday you wern't going out on Saturday. Damn greedy bastards. I remember ordering stuff from catalogs where you filled out the order form in the middle, enclosed a check and mailed it. Your stuff arrived about a month and a half later. Might have to go back to that system.

F-em. Write a check for cash at the bank and only pay with cash. This is the way it was done in the olden day's back in the early 80's. I remember if you couldn't get to the bank on Friday you wern't going out on Saturday. Damn greedy bastards. I remember ordering stuff from catalogs where you filled out the order form in the middle, enclosed a check and mailed it. Your stuff arrived about a month and a half later. Might have to go back to that system.

 

Been seeing that a lot more lately. Merchants will start to lose business if they keep adding on fees after the sale charge.

Wonder how many customers they lost?

 

A shitload according to some reports. In the thousands.

I worked in the credit/debit card industry for most my life. I'm since unemployed. You'd not believe the dollars passing hands in this industry. Even being "in the business", you'd never tear me away from my cash. No one charges a fee to use cash, everyone will take cash, etc. I can tell I'm getting more and more like my parents/grandparents the older I get.

 

I'd even like to see bardering make a come-back, whereas I would trade you my service for one of your products that I need.

Wonder how many customers they lost?

Honestly, not too many. It's unbelievable what the media can do, and how the "telephone" game works. Many people came rushing in, thinking they were already being charged, and for EVERY SINGLE TIME they swiped their card Almost all of them were calmed down when told it was only once a month, there were plenty of ways to avoid it, and it wasn't starting for AT LEAST 2 months. I'm glad the banks are dropping this idea, it's one of the dumbest ideas I've ever heard of.

No one charges a fee to use cash, everyone will take cash, etc.

 

Except when buying an airline ticket, you'll be suspected of being a terrorist. Don't forget the warning sings.

 

It amazes me though how outraged people got over BoA instituting fees, because they got screwed by the gobberment. But you don't hear any outrage over the new fees that the gobberment is pushing on to airlines, which will raise airfare.