Bank of America’s quick reversal

[ProSense]

Bank of America’s quick reversal

By Steve Benen

Bank of America recently announced a controversial move: it would start charging customers $5 a month to use their debit cards. This, despite BofA’s $6.2 billion quarterly profit.

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No one — other than other banks — was pleased, and the debit-card fee generated fierce criticism from customers to consumer advocates to President Obama. Last week, Bank of America started backpedaling, insisting it would offer customers more ways to avoid the fee.

Today, BofA gave up entirely.

Bank of America Corp. is dropping its plan to charge customers $5 a month for making purchases with their debit cards, a person familiar with the situation said.

The move is a dramatic retreat following decisions by several rivals in recent days to drop customer tests of the new fees. SunTrust Banks Inc. and Regions Financial Corp. also said Monday that they will stop charging customers for debit-card transactions.

Bank of America decided against the fees due to negative customer feedback on the plan and the moves by rivals, which left the Charlotte, N.C., lender as the only big bank planning to levy the fee on some customers next year.

The timing of the announcement was probably not accidental — a growing effort to have customers switch to credit unions had marked this Saturday as “Bank Transfer Day.”

So, here’s the question for Bank of America: if the fee was absolutely necessary, and was the unavoidable outcome of those new government regulations, why was it cast aside so quickly in the face of public outrage?

more

The Hill

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Durbin led the charge to include the reduction of swipe fees as part of the Dodd-Frank law. He has called the fees unnecessarily high and a burden on consumers and merchants — they have dropped from an average of 44 cents to 24 cents per transaction on Oct. 1.

This month, the Illinois senator sent a letter to Wells Fargo, asking for an explanation as to why it is considering the fees following the announcement of the bank's 21 percent increase in third quarter profits.

Durbin also sent a similar letter to Bank of America, chastising the bank for the fees.

"It is disingenuous for banks to claim they are somehow entitled to make up reductions to a revenue stream that they never would have received in the first place in a transparent and competitive market,” he wrote.

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[raccoon]

1. That's what it takes to make these SOBs back down: public outrage.

Or any of the other powerful SOBs who are sending us to the poorhouse.

[louis-t]

2. And it wasn't THAT quick.

[Arugula Latte]

3. I'll bet they are going to sneak a buttload of fees in here and there and not mention them.

[ProSense]

4. Then

"I'll bet they are going to sneak a buttload of fees in here and there and not mention them."

...they'd have even more problems. The reason they mentioned the $5 fee is because of new disclosure requirements. Still, I'm sure the banks aren't going to give up trying to screw people.

[uponit7771]

5. They saw what happened to NetFlix, people can move quick easy and fast these days to other services