Bank of America, acknowledging that its latest attempt to shake more money out of its customers’ pockets was destroying goodwill and hurting revenue, announced today that it was canceling its plans to impose a $5 monthly fee for debit card use, following in the footsteps of JPMorgan Chase, Wells Fargo, SunTrust, and Regions, which have all made similar moves in the last few days.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” said David Darnell, co-chief operating officer of Bank of America, in a news release. “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
Bank of America attributed its decision to “customer feedback” and “the changing competitive marketplace.” By the latter, the bank undoubtedly means the ads that community banks, credit unions, and other nationwide competitors like Ally are running against it, along with grassroots efforts intended to encourage people to move their money and take their business elsewhere.
While Bank of America’s decision is good news – it shows what a loud consumer backlash can accomplish – this decision amounts to a calculated retreat. Bank of America and its executives are not sorry for having come up with this plan to force man (if not most) of their customers to pony up an extra sixty bucks a year to use a debit card. They’re only sorry that it didn’t work.
They probably figured they could weather some bad P.R. But the story didn’t go away, and when other banks started canceling their plans to charge debit card fees, it left Bank of America in a bad position. So they reversed course.
Bank of America will surely be looking to figure out a new way to pass along costs to its customers. The debit fee gambit didn’t work, so now they’ll come up with something else. When they do, we’ll help sound the alarm as to what that is.
Now is still a good time to switch to a credit union if you continue to do business with a Wall Street bank. Credit unions offer lower fees, better rates, and superior customer service. They’re not for profit and owned by their members. They’re the smart, sensible alternative to greedy banks.