Banks Back Down on Debit Card Fees
Some banks are backing down on planned monthly debit card fees after angry protests from customers and condemnations from both Congress and President Obama. Some consumers had even declared this Saturday, November 5, as ‘Bank Transfer Day.’
SunTrust Banks today announced that it will end its $5 per month debit card fee which it had instituted in June on its Everyday Checking customers. The bank said it will refund the money to customers.
On Friday, Wells Fargo scraped plans to charge $3 per month to customers who used their debit card. The bank had planned testing this fee beginning November 15 on customers in Georgia, Nevada, New Mexico, Oregon, and Washington.
Also on Friday, JP Morgan Chase said it is ending its test of a $3 monthly debit card fee in Wisconsin, and is not going to impose it on consumers.
Bank of America is working on plans to give customers some ways to avoid the $5 debit card fee it will impose beginning in 2012. The fee may be waived for customers that use Bank of America credit cards, maintain higher checking account balances, or make designated direct deposits. Customers who don’t qualify could still get stuck with the fee.
Regions Financial Corp. continues to charge $4 per month to some of their debit card customers.
This is great news for consumers, but this is not the end of new fees. Banks are still losing billions of dollars in revenue from the interchange fee regulations. They will find more subtle ways to make up for this lost revenue, increases that may fly under the radar. Banks may increase existing fees or raise the introductory interest rates on credit cards. They will find some way to increase their revenue, and it’s always the consumer that will end up paying for these increases.