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Bank of America May Soften $5 Debit Card Fee

9:15 AM, Oct 31, 2011   |    comments
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By Jason Kessler

NEW YORK -- Bank of America is considering softening its controversial policy of charging some customers for making purchases with their debit cards, according to a person familiar with the bank's plans.

In September, the bank announced that it would begin charging most customers $5 a month if they used their debit cards to make purchases.

The fee, which would begin in January, set off a barrage of public outrage at the bank.

Now, under proposals being considered by the bank, Bank of America would offer customers new ways to avoid having to pay the fee.

Currently, only customers with certain premium accounts would be exempt from the fee.

Under the new plan, customers would be able to exempt themselves by having their paychecks deposited directly with Bank of America (BAC, Fortune 500), maintaining minimum balances or by using Bank of America credit cards.

Bank of America's retrenchment comes the same day that JPMorgan Chase (JPM, Fortune 500) decided not to impose similar fees. Chase's decision follows a test of the fee it began in two states in February.

Wells Fargo (WFC, Fortune 500) also announced late Friday that it is canceling the debit card fee tests it was planning to introduce in five states. Customers in Georgia, Nevada, New Mexico, Washington and Oregon will no longer see a $3 debit card fee that was scheduled for statements beginning on Nov. 15.

Bank of America is not alone in announcing a charge for debit card purchases. Sun Trust (STI, Fortune 500) and Regions Banks (RF, Fortune 500) have all imposed similar monthly charges.

The banks' decision to impose debit card fees is widely viewed as a response to the Durbin Amendment to the 2010 Dodd-Frank financial reform bill. Enacted in July, the provision reduces the fees banks can charge merchants for debit card purchases to 21 cents from 44 cents.

CNN

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