Bank of America has abandoned plans to begin charging debit card holders five dollars a month to use their cards, a proposal which drew intense consumer and political backlash since announced in late September.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” said Bank of America co-COO David Darnell said in a written statement. “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.”
The company’s move may bring the closing chapter to a public relations campaign from major U.S. banks that has lasted more than a year, during which financial titans insisted that last year’s Wall Street reform bill had made debit cards unprofitable for banks, forcing them to charge new monthly fees.
After Congress required the Federal Reserve to crack down on the fees retailers pay banks to accept plastic, banks insisted the rules would leave them with no choice but to impose new charges on consumers. When BofA rolled out its new debit card fee, the company’s spokespeople portrayed the move as part of an inevitable industry-wide response to the fee limits that was dictated by basic economics.
“This is not just a question for us, it’s for all banks,” BofA spokesperson Ann Pace told HuffPost in late September. “The price of a debit card was previously determined by the amount and type of transactions. We were able to pass some of these costs along to merchants, but because of regulatory changes, we are adjusting our pricing to reflect today’s economics.”
Bank of America CEO Brian Moynihan also defended the fee in October, saying that the bank “has a right to make a profit.” But retreating from the fee will likely help the bank keep customers. One-third of consumers said they would leave their bank if it started charging a debit card fee.
A month later BofA and other banks seem to have rethought those economics.