Big banks faced fewer account closures after ending $5 fee

Big banks saw fewer account closings after lenders canceled plans to charge a $5 monthly debit-card fee.

“We saw an elevated level of account closings in the quarter,” Brian Moynihan, the CEO of Bank of America Corp., said in a conference call with analysts yesterday, according to Bloomberg. “Once we pulled it back, you saw that mitigate.”

Banks like Wells Fargo and Bank of America announced the monthly fee charges after the implementation of Dodd-Frank regulations that limited debit purchase fees. Bank of America reversed its decision in November after a storm of public outcry and after other banks decided to toss out their own plans.

Interest deposits at Bank of America fell $4.4 billion in December and non-interest deposits fell approximately $1.1 billion, according to a financial report posted on the lender's website. Overall, Bank of America posted a net income of $1.99 billion in the fourth quarter of the 2011 fiscal year, after 2010's $1.24 billion loss.

The Durbin Amendment caused banks to announce the fee plans after revenue from debit card transactions declined.

The announcement to charge the fee drew instant criticism. Demonstrators gathered in Los Angeles and Boston to protest the proposed fees. President Obama said the plan was “not necessarily fair to consumers," according to Bloomberg.

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