Bank of America has decided to abandon its plans to charge a monthly fee of $ 5 for using its debit card in response to complaints from both customers and politicians.
Bank of America said the move to cut fees was in response to customer feedback and competition, with the company reversing its stated “right” to make a profit instead of listening to its customers.
The company was under pressure to make the change as rivals withdrew from their plans to charge customers for the use of their debit cards.
David Darnell, co-director of Bank of America, said in a statement:
“We have listened very carefully to our customers over the last few weeks and acknowledge their concerns about our proposed debit fee.”
Escaping behind JPMorgan Chase in the largest US banks, Bank of America CEO Brian Moynihan had previously defended his decision on ATM fees, saying the bank “has the right to make a profit”.
However, Bank of America reported a profit of $ 6.2 billion in its third quarterly earnings report in October.
Last week, JPMorgan Chase & Co and Wells Fargo & Co decided to cancel test programs for debit card fees, while SunTrust Banks Inc and Regions Financial Corp announced on Monday that they would end monthly fees and refund their customers.
After Bank of America announced their debit card fee, the Navy Federal Credit Union, the largest credit union in the country, announced that the volume of new open accounts was over 20% above normal.
Bank of America plans to start charging customers next year.
Banks have begun drafting monthly fees to offset losses from a law that reduces the fees they charge retailers when consumers spend their cards.
The new bank fees have provoked strong criticism from consumers and politicians, and much smaller banks and credit unions have abandoned the practice.
Speaking against the banks’ decisions in an interview with ABC News in October, President Barack Obama criticized the banks’ high fees, saying they “have no inherent right to just know, get some profit” if their customers’ customers are abused. ”.
“Banks can make money. They can succeed in the old-fashioned way by winning it. ” said President Obama during the interview.
Bank of America has planned to provide customers with more ways to avoid the fee, such as maintaining minimum balances, depositing salaries directly, or using their Bank of America credit card.