BofA Likely To Alter Rules For Debit Card Fees After Criticism

(Rick Rothacker) - Bank of America Corp, after receiving heavy public criticism for a planned $5 per-month debit card fee, is likely to give customers more ways to avoid the fee, a person familiar with the bank's plans said Friday.

The second largest U.S. bank is likely to allow many customers to avoid the fee by taking measures such as maintaining minimum balances, having paychecks direct deposited, or using Bank of America credit cards, the person said.

Under earlier plans, customers might have needed balances totaling $20,000 across all their Bank of America accounts to avoid the fee.

Bank of Americas unleashed a firestorm of criticism from customers, consumer advocates and politicians last month when it disclosed plans to charge customers $5 per month for using their debit cards, starting sometime next year. The goal was to make up revenue lost to a law that slashes the fees banks charge retailers when consumers swipe their cards.

Some other major banks have quietly pulled back on the charges. After testing a $3 per month fee in two states since February, JPMorgan Chase & Co decided not to charge customers, a person familiar with the situation said on Friday. The test will end next month and will not be extended or expanded, the person added.

Wells Fargo & Co started testing a $3 per-month fee in five states on October 14. The bank has not had time to evaluate results and has not made any changes in the program, Wells spokeswoman Lisa Westermann said.

Charlotte, North Carolina-based Bank of America is not abandoning the fee now and will likely include it in new account types the bank is testing in three states. The bank plans to roll out these packages nationwide next year.

The $5 per-month fee may still remain an option for customers, the person said.

The bank has said the purpose of the new account types is to provide customers with upfront pricing, instead of hitting them with penalties after the fact. Customers can pay monthly fees of between $9 and $20, or avoid the charges by keeping minimum balances, using their credit cards or having a minimum amount deposited to their account.

While some banks have disclosed plans to apply similar fees, many banks and credit unions decided not to institute the charge and have encouraged customers to switch banks.

(Reporting by Rick Rothacker in Charlotte, North Carolina; editing by Andre Grenon)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[eileenwest]

11:01 PM on 10/30/2011

I'd like to know why Bank of the West in CA is getting away with charging $1/month for using your debit card? They seem to be flying under the radar while BofA, Wells and Chase are taking all the heat just for talking about a charge--Bank of the West is already charging customers like ME! I'm closing my account tomorrow.

[cgoodie]

11:42 PM on 10/30/2011

It's my opinion that BofA will not care if they loose small depositors. They will collect all they can in fees until the last one leaves, then continue to make their money buying and selling their own stock and gambling with institutional 401k's, etc.

[sidnee]

06:24 PM on 10/30/2011

See, if customers moan, yell, and pull their money out, these guys get the message. We all need to be more pro-active. We have power--with our dollars.

[onemarbleleft]

08:55 AM on 11/01/2011

That's exactly true. There's no power in one or two people pulling out their money, but if millions do it, we do have the power.

[ECJIM 3ABTPA BONHA]

05:28 PM on 10/30/2011

I say Too late BOFA, ...Move your account elsewhere these guys are crooks. I'm sure once all this settles done they will end up pushing the fee to all customer in the end anyway. Move away from these big banks. As Jayuucee said....Let BofA go down the GREED TOILET

[jayuucee]

04:19 PM on 10/30/2011

The solution to the BofA greed? Close your accounts and move to a credit union. Problem solved. BofA will see that they screwed up but are much too arrogant to admit it. So they will try to appease the public by saying they will do this or that for you. Ha! Don't believe them. They will add other hidden fees and get their money that way. They are a bunch of greedy crooks. I have moved my money out of that horrible place and have encouraged many of my friends and co-workers to do the same. They are either thinking about it or have already done it. Let BofA go down the GREED TOILET. Credit Unions are definately the way to go. I have been very happy since switching.

[Russ Gaskin]

01:25 PM on 10/31/2011

Totally agree. This campaign's logic is beyond me. You've just done B of A a favor by making it okay to for millions of consumers to stay with them. Score one for empowerment; Score nothing for economic change.

[jflorish]

12:37 PM on 10/30/2011

Glad to see boa, chase, and look like wells will also now get rid of the fee. I don't use debit cards but the fee does seem kind of ridiculous.

[Larry Motuz]

08:50 AM on 10/30/2011

Switch anyway!

[imanormalalien]

07:10 AM on 10/30/2011

lol only rich people would have avoided the fee? what the f***

[cyoohoos]

08:56 AM on 10/30/2011

Rich people, people with jobs that do direct deposit, or any sucker crazy enough to use one of their credit cards

[jflorish]

12:36 PM on 10/30/2011

Credit cards are fine as long as you pay them off monthly. Most now give 1 or 2% cashback, which is a good deal.

[II Quorum II]

12:18 AM on 10/30/2011

I spent untold hours trying to figure out how to prevent using BoA and then whining incessantly about them on the internet where ordinary folks would have to listen to me complain about the bad decisions *I* had made by doing business with them in the first place. Then it came to me.... just don't do business with them [sigh]

[yogajan]

12:05 AM on 10/30/2011

I love my credit union!!. Everyone I know has a B of A story and none of those stories are positive.

Frankly, I think you money is safer in a shoe box. I continue to use cash for most of my purchases, except when I need a receipt. It is so freeing not to pay those stupid fees and interest. Sorry B of A (and Citibank) you can keep your fees and I'll take my money elsewhere.

[camarillofats]

10:27 PM on 10/29/2011

American capitalism is one word; GREED!

[gobsmacked58]

09:59 PM on 10/29/2011

B of A Strikes again !!!!!!!!!!!!!!!!!!!!!

[Vascopolis]

09:30 PM on 10/29/2011

I HOPE THEY GO OUT OF BUSINESS.

GREEDY, GREEDY, GREEDY, while 99% of America STRUGGLES to make ends meet...

[Rubberfish]

08:46 PM on 10/29/2011

Greed, greed, greed. That's all it boils down to. It's not enough that the banks have been bailed out with OUR money, now they're looking for ways to squeeze even more out of us! I'm not a psychic, but I'm guessing they'll lose a lot of business because of this.

[P-Woman]

08:42 PM on 10/29/2011

BoA has been ripping off customers for decades. They used to be a little more sneaky about it, but obviously came to the conclusion that all the people are stupid all of the time. Wake up BoA, you are no longer fooling 95% of your customers. You will be left with the goobers of the Republican party and emptier pockets, carry on you pretending capitalists.

[II Quorum II]

04:10 AM on 10/30/2011

Seems to me about 99% of the complainers are liberals. Republicans typically don't use BoA, and we certainly wouldn't pay $5 per debit card swipe. That's more typical of people who live paycheck-to-paycheck and have no alternative.

[VFausone]

09:13 AM on 10/30/2011

Yep - rich people won't pay the fee - which is why it's a problem.

[EricFromNowhere]

12:09 PM on 10/30/2011

So there are no poor republicans? Now I understand....

[TheThumb]

08:35 PM on 10/29/2011

What a bunch of pricks they are & Moynihan leads the pack. Her's an eye opening article for you

Daily Kos: #OWS - BofA: if you owed $75 TRILLION in gambling ...

He is incensed about the bad press he & his bank are getting from occupy Wall Street and others? Seriously? While Moynihan made $10 million in pay & stock options, read about what he has up his sleeve now. We should be screaming for Eric Holder's resignation for failing to investigate the banks and the FED. And, the likes Moynihan, Dimon and others should be in prison stripes and leg irons.