Bank of America has dropped plans to charge a $5 monthly fee on debit cards.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer, said in a statement from the Charlotte, North Carolina-based lender today. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
The Official Press Release is here.
According to Bloomberg:
Bank of America reversed course after competitors including Wells Fargo & Co. (WFC), the No. 2 debit-card issuer, decided not to charge similar fees. Atlanta-based SunTrust Banks Inc. (STI) and Regions Financial Corp., based in Birmingham, Alabama, said yesterday they will eliminate their check-card fees after customers rebelled.
Cedar Posts Take:
The Bank of America debit card fee, the worst idea since "new coke" is one of many issues driving the Occupy Wall Street movement which was quick to claim a victory. But several groups have vowed to continue the fight against Bank of America claiming the greed rules at the bank and that nothing short of bringing the once powerful bank to it's knees will be accepted.
6 comments:
Cedar - you are the last person I thought would be anti-business. First of all BofA was following the lead of other banks in putting in the debit card fee. Secondly with the regulations prohibiting what they can charge poor credit risks and people that can't manage their accounts (limits on overdraft fees for example) along with restrictions on debit card fees to merchants they are in need of other sources of revenue like any business (banks are a charity after all). When many other banks dropped the debit card fee you could see this coming. However, I'm sure other fees or increases in existing fees will be coming since banks, like other public companies, have to make profits and serve the interest of shareholders. Simple economics - something I thought you, of all people, would understand.
sorry - should have said banks AREN'T a charity after all (which is probably assumed but wanted to clear that up
Anon 3:56
A few points of clarification: other banks were testing lower fees, B of A was the first to impose a fee without any testing and at a rate higher than the others. There is a difference between being able to charge fees and whether one should because reputation have value, too, and BofA continues to squander theirs through consistent arrogance and greed. Banks are certainly entitled to make a profit but not a certain amount of profit. Let's not forget that BofA required one of the two largest public bailouts three years ago. Let's see, why was that? Oh, yeah, its greed got in the way of sound business practices when it came to making home mortgages. B of A has done nothing to earn back its reputation and the sad thing is, it used to be a good one. Now it probably won't matter what it does because it will all be seen as nickel and diming the average customer, especially in today's economy that, oh, that's right, B of A helped push over the edge. Fortunately, customers do have a choice and they can take their business to another financial institution and that seems to be happening in droves.
OK, I will probably receive a lot of flack here. But the biggest problem with Occupy Wall Street is it is mostly unions, socialists, Marxists and now Muslims, and the like backing these folks.
These are the same people they should be protesting since all of them are in cahoots with Congress and any prez in office! And you can best believe all their CEO's and leaders are rich! The only ones with wealth in the above political systems ARE the leaders....also the goal of each of these organizations has a sole purpose, to control the people.
Now if Occupy Wall Street had any common sense they would be in DC occupying Congress! THAT is where all the lobbyists do their bribing. Like it or not it is Congress and the Prez Administration (almost ALL of them, Dem & Repub alike) that have caused many of our issues.
Congress should:
1) Be forced to take pay decrease
2) Never be given lifetime benefits
3) Have terms limits
4) End lobbyists period!
5) Provide their own healthcare just as we must do
6) Be forced to use and abide by the same laws/codes they enact...
The way I see it, they are a joke because they say they want this, but the hypocrisy comes from who supports them and their beloved messiah being at the top of that list....
3:56,
Debit card swipes cost the merchant 22 cents, while the cost to the bank is 8 cents. 150% profit.
Remember, banks can borrow as much money as they want for 0% from The Fed and buy US Treasuries that yield 3%, so long as they have a minimal amount of capital to show for it. It takes a total imbecile or the most corrupt of criminals to run an unprofitable bank.
Based on your comments that it takes an imbecile to not run a profitable bank there are a lot out there since over 100 banks have failed and had to be taken over this year alone (plus many more losing money). Sure there are certain revenue sources but it also takes a lot of money to run the typical bank infrastructure. I'm all for B of A (and other banks) to eliminate a large number of their branches since with ATMs, on-line bill pay and Internet/Cell phone access the need to go to a branch is greatly diminished. B of A is doing that and catching flack for the associated layoffs. Sorry but the old branch banking system has gone the way of the buggy whip manufacturer. Companies that retool for the future and ensure profitability are the ones that will thrive.
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