Sen. Dick Durbin of Illinois, the No. 2 Democrat in the Senate, said Bank of America customers who don’t want to pay a new $5 monthly debit card fee should “vote with their feet” and find a financial institution that won’t charge them for accessing their accounts.
“Get the heck out of that bank,” Durbin said Monday on the Senate floor. “Find yourself a bank or credit union that won’t gouge you for $5 a month. ... What Bank of America has done is an outrage.”
Bank of America announced the fee days before new limits went into effect on the amount banks can charge merchants in “swipe fees” for debit card transactions. Durbin led the charge for limiting bank card swipe fees as part of the financial reform legislation approved last year, saying the charges were costing retailers too much. The new limits went into effect Saturday.
When Bank of America announced the new $5 fee, it was quickly seen as a result of the swipe fee reform -- and dubbed the “Durbin fee” by some.
Bank of America has said the reduced “swipe fees” would cost the institution $2 billion annually.
The bank had previously announced it would be cutting 30,000 jobs.
The senator stood proudly by the “Durbin fee” moniker Monday.
“I am honored to be connected with this effort,” he said. “What we are doing is fair.”
In an interview with ABC News and Yahoo on Monday, President Obama defended his administration’s action to limit credit card fees in general and criticized the new fees being imposed by BofA and other banks.
“What the banks are saying is that, rather than take a little bit less of a profit," the industry would prefer to charge its customers more, Obama told ABC’s George Stephanopoulos. “This is exactly why we need somebody whose sole job it is to prevent this kind of stuff from happening.”
Obama said the new fees can be stopped through competition. “My hope is, is that you’re going to see a bunch of the banks who say to themselves, you know what, this is actually not good business practice,” he said.