Bank of America’s announcement that it would drop its recently proposed plan to charge its debit card holders a $5 monthly fee may not have its intended effect, an expert recently revealed.
“Consumers voted with their money and Wall Street institutions finally got it – but only after waking their customers up to the fact that they are being treated like numbers, not people,” NAFCU President Fred Becker said, according to NAFCU.org. “Recalling debit fees now is like trying to get toothpaste back in the tube. It simply does not work.”
JP Morgan Chase also recently abandoned plans to charge a monthly debit card fee and promised to return the fees it collected from its customers while it tested the fee out in a few locations, according to NAFCU.org.
Bank of America said its decision was based on customer reaction and competition.
Some observers remain skeptical that banks are suddenly recalling debit card fees, noting that several are still charging for other services that have generally been provided for free in the past.
Banks are desperate to recoup revenue they have been losing since the Durbin Amendment went into effect in Oct. The rule limited a major source of their profits by capping debit card swipe fees.
“Having warned about the consequences of flawed rules regulating debit card transactions, I’m not surprised banks are now charging new fees in response to the regulations,” Sen. Bob Corker (R-Tenn.) said. “These fees are a predictable consequence of government price fixing. When governments engage in price fixing, the consumer always loses.”
Corker was a leading opponent of the Durbin Amendment and sponsored an amendment to delay its implementation, although it was defeated on a Senate roll call vote.