So the day after Suntrust decides to axe the debit card fee, Bank of America said Tuesday it’s axing its plan to charge a $5 fee for customers who use their debit cards to make purchases.
In September, the bank announced that it would begin charging most customers the monthly fee early next year.
But after widespread customer revolt and announcements by several of its rivals that they won’t charge similar debit-card fees, Bank of America (BAC, Fortune 500) backpedaled on its plan. Customers who use their debit cards will no longer incur the fee starting in January.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” said David Darnell, Bank of America’s co-chief operating officer. “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
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Before making the announcement, the bank was considering ways to soften the fee, by offering customers new ways of avoiding it — like making direct deposits or maintaining minimum balances.
But Bank of America still stuck out as other banks fell off the bandwagon. Late last week, Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500) both called off pilot programs that would impose debit card fees in certain states.
On Monday, SunTrust (STI, Fortune 500), a large regional bank based in Atlanta, announced that it will no longer charge $5 a month for debit card purchases starting Wednesday. Shortly afterward, Alabama-headquartered Regions Bank (RF, Fortune 500) said it will nix its $4 monthly fee on Tuesday.
Customer revolt: The debit card fees these institutions originally charged (or planned to charge) sparked pledges by thousands of consumers to move their money out of big banks.
Debit card fees: Some banks say no
Occupy Wall Street had been calling for consumers to celebrate “Dump Your Bank Day” next week. Meanwhile, the National Foundation for Credit Counseling conducted a poll that showed 62% of consumers would leave their bank if it began charging a debit card fee.
The Progressive Change Campaign Committee said it got more than 51,000 people to pledge to take their money out of major financial institutions, with 21,500 consumers planning to remove their money from Bank of America specifically.
While these groups say the decision by banks to scrap the debit-card fee is a step in the right direction, it doesn’t mean consumers are going to be running back to their banks in droves.
“This shows that when the public fights back together against Wall Street, we can make progress — but the fight is nowhere close to over,” said Adam Green, co-founder of the Progressive Change Campaign Committee. “Bank of America and other Wall Street banks broke the law, ruined our economy, and cost people their jobs, their homes, and their life savings … By moving our money, we will make these irresponsible banks less ‘too big to fail.’”
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