Bank of America likely to make it easier to avoid debit card fee
Bank of America Corp., battered by a public backlash over plans to slap a $5 monthly charge on debit cards, is considering more ways to enable customers to avoid paying the charge, according to a person familiar with the matter.
The nation’s second-largest bank is likely to allow customers to sidestep the fee if they use BofA credit cards in addition to debit cards, have certain direct deposits or maintain a minimum balance, said the person, who was not authorized to speak publicly. BofA previously said it would waive the fee only if a customer had a mortgage or $20,000 in accounts at the bank and its Merrill Lynch brokerage.
A host of critics including President Obama have attacked the Charlotte, N.C., bank’s plan to start charging account holders if they use their debit cards to make purchases, although ATM transactions are free. The populist outrage against it, highlighted by protests staged by Occupy Wall Street movement, has caused other major U.S. banks to hold off on imposing similar fees.
JPMorgan Chase & Co., which for eight months has been dinging its Georgia and northern Wisconsin customers $3 a month for using debit cards, said Friday that it would end the test next month and wouldn’t impose the fee anywhere.
Other banks that say they have no plans for such a fee include US Bank, Citibank and Wells Fargo, which said Friday that it was canceling a test of a $3 monthly fee in five states.
The big regional banks SunTrust and Regions already have imposed fees similar to Bank of America’s planned debit card charge.
Union Bank said Friday that it wouldn’t impose a debit card fee but would begin charging customers for checking accounts that had been free — $10 a month with printed statements or $8 for online-only statements. The fees can be avoided with one direct deposit of at least $100 a month or by keeping average balances of $1,500 in the checking account or $5,000 in linked accounts.
JPMorgan made no official announcement about the fee, but a person who had been briefed on the matter said the bank’s customers preferred a program it calls Chase Total Checking. That package costs $12 a month ($10 monthly in California, Oregon and Washington) but customers can avoid the fee if they have at least $500 direct-deposited each month or keep at least $1,500 in the account or $5,000 in linked Chase accounts.
Citibank has said the customers it surveyed expressed a strong dislike for debit card fees. It has raised its fee for a basic checking account but has said it wouldn’t impose a debit fee.
Bank customers across the country have expressed “outrage” over the BofA fee, according to Norma Garcia, who heads up a financial-services program for Consumers Union, the advocacy arm of Consumer Reports.
?”It’s time for Bank of America to listen to its customers who are saying loud and clear, ‘Drop the fee or we’ll drop you,’” Garcia said in a statement. “All banks that are considering debit card fees should ditch those plans.”
Bank of America Chief Executive Brian T. Moynihan said this week that he was “incensed” by public criticism of his company. He told employees to push back by reminding local leaders of BofA’s contributions to their economies.
