Brad Miller Pushing Ahead With Reforms After Bank Of America Changes Debit Card Fee Rules

Bank of America is reportedly scaling back its plans to charge a $5 debit card fee to its customers, but Rep. Brad Miller (D-N.C.) is still pushing legislation that would make it easier for customers to switch banks.

Miller wants consumers to be able to simultaneously change their direct deposit, electronic bill paying and other features that make it sometimes difficult to switch banks.

"This is great news, but I'm not going to hang a 'Mission Accomplished' banner," Miller said in a statement to The Huffington Post, in response to the news that BofA is reducing the number of customers affected by the new debit card fee. "The very fact the banks just up and announced the fees shows we need real competition in consumer banking."

Miller said that his reform was inspired by The Huffington Post's Move Your Money campaign.

Sen. Dick Durbin (D-Ill.) encouraged customers to leave Bank of America, and move their money to a bank that does not charge a debit card fee. The Chicago Tribune dubbed the charge the "Durbin fee," over his swipe-fee reform that capped the amount banks could charge in merchant transactions. Banks often used swipe fee reform to justify new debit card fees.

Bank of America, the second largest U.S. bank, reportedly will allow customers to avoid the $5 fee for using a debit card by maintaining minimum balances, having Bank of America credit cards or having paychecks direct deposited -- similar to the ways to avoid fees for checking accounts. Previously, the fee would have only not applied if you had $20,000 or more deposited in Bank of America accounts. Chase and Wells Fargo have announced that they will drop their debit card fees.

Molly Katchpole, a 22-year-old living in Washington, D.C. and working two part-time jobs, started a petition on Change.org over the proposed fee and collected over 300,000 signatures. She eventually got a call from a Bank of America executive after the petition hit over 200,000 signatures.

"I want Molly on my side on everything," said Miller.

Comments

[Jay Gould]

10:02 PM on 11/02/2011

Now that all big banks have abandoned their plans to charge debit card fees, where does that leave us? Will they, humbled by popular outcry and intimidated by politicians' threats, give up on their plans to make up for the huge revenue losses they will suffer as a result of the passing of the Durbin Amendment?

No, they will not. What will happen instead is that the card issuers will discover other, more subtle ways to get what they want. They will learn from the debit card fee disaster and devise more subtle strategies to achieve their objective.

When the dust settles, new revenue sources will be found and the issuers will recoup their losses. The upshot will be a rise in revenue for retailers, due to lower card processing fees, at the expense of consumers who will end up paying higher bank fees of some sort or other. The card issuers will not be worse off than before the Durbin Amendment was enacted and may actually be better off. http://blog.unibulmerchantservices.com/banks-abandon-debit-card-fees-will-find-more-subtle-ways-to-raise-revenue

[masscollegestudent]

09:24 PM on 10/31/2011

I would love to switch banks, but it would mean that I would have to drive further to make deposits and withdrawals. I'm lucky that I have direct deposit because BOA always denies my credit card app (Citi, Chase and Discover have always approved me) and I don't have a balance of $20k, LOL! As aqua2lib metioned below, "Insulting our intelligence" regarding maintaining a $20k monthly balance.

But in case BOA does become shady, I've decided to open another bank account as a back-up, and only utilize BOA for the direct deposit. I like BOA and its features, and I've literally signed up for a checking acocunt at every single local bank, and BOA is the only convenient one. If they continue to keep this $5 fee when the new year begins, I'll close my account 100%, but for now, I'll keep it open and everytime my direct deposit comes through, I'll withdraw the full amount and utilize the other bank for everything else. We shall see how this ends up playing out...

[Barbara DiIorio]

09:18 PM on 10/31/2011

I have BofA accounts and want to change to my credit union, but there are so many payments coming out of the account that it will take me a year to have enough money to switch everything over. I live paycheck to paycheck, pay all my bills, barely. I'm a 99! I despise BofA, but their online banking is the best of all of them.

[stratego]

07:47 PM on 10/31/2011

Go, Durbin!

Signed,
The REAL People

[stratego]

07:46 PM on 10/31/2011

Sure, Miller. He's just going toget everyone by some other loophole to make money off of customers. "I want Molly on my side." What a crock.

[aqua2lib]

05:10 PM on 10/31/2011

Humm...$20,000 or more deposited in my account would avoid a $5 a month fee from Bank of America...Now how is that fair. If Chase could avoid this fee, Wells Fargo and Credit Unions, then my next step is a no brainer. I guess to be fair, and just maybe we can find out what percentage of Americans, at this day and age maintain over 20k in their checking accounts. So far what I found out is that the average american saves $392 a year. I guess BofA is insulting our intelligence by making us believe that this change is for the good of their customers. I don't buy it.

[rltballer]

08:45 PM on 10/31/2011

Direct deposit of a payroll check of some kind will also avoid this fee.

[Ethan0137]

09:22 PM on 10/31/2011

Now. Not originally.

[LickMyDecalsOffBaby]

05:01 PM on 10/31/2011

take your money out of the big banks and put in in your local credit union...good job, congressman.

[JeanVA]

07:41 PM on 10/31/2011

I want to - but have no idea how to start with my current direct-deposits. If I also had 'bill-pay', I think I'd just give up...

[middlloy]

11:45 AM on 11/02/2011

Never pay fee for ATM, I have several options two pharmacies,and an two outside ATM.I can get unlimited cash the checkout at walmart.