Major Banks Now Shying Away From Adding Debit Card Fee
- Posted on October 28, 2011 at 5:17pm by
Becket Adams
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Despite saying they would, several banks are now rethinking earlier proposals to implement a Bank of America-style debit card fee, reports the Wall Street Journal.
After Bank of America received bad press (including two senators suggesting customers take their business elsewhere), banks including JP Morgan Chase, US Bancorp, Citigroup, PNC Financial Services Group, and KeyCorp have now publicly stated that they are dropping the idea of adding a similar fee.
“We looked at all options and quickly decided it didn’t fit with our overall strategy,” says a spokesman for KeyCorp in a recent Newser article.
“It’s not about the money. It‘s about ’are you kidding me?’“ says one US Bancorp customer who said she would have ”immediately” left the bank if it instituted a fee.
Although Chase tested a $3 monthly fee in Wisconsin and Georgia, it came to the conclusion that pursuing that strategy wouldn’t do them much good.
Citigroup came to a similar conclusion.
“Our customers said that would be a massive source of irritation for them,” said Stephen Troutner, Citigroup’s head of consumer and small business banking, in the journal report.
“Any time you hear that kind of emphatic feedback from customers, you’ve got to listen to them,” he added.
Todd Barnhart, head of retail products at Pittsburgh-based PNC, agreed: “I generally think customers don’t want to be nickled and dimed,” he said.
However, not all of the banks are dropping the strategy. There are still some that are going to pursue the idea of implementing the debit card fee.
Wells Fargo, for example, is testing the fee in five states and has yet to announce if it will go nationwide with it.
And despite the public backlash, SunTrust and Regions Financial are sticking with their earlier announcements and are implementing the monthly fee, according Newser.
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slvrserfr
Posted on October 30, 2011 at 2:27pmBut of course, because the markets went up – they’re increase their cash flow through investments instead, where they’ll make more than they ever could nickeling and diming their customers.
Report Post »CommonSenseTalk
Posted on October 30, 2011 at 5:43amPeople just know one thing, this is government regulations at work. If you run a company and make 10 percent profit, you want to make that every year. You were able to make some money on customers that cost you money because they never pay on time and just don’t keep their word. So you charged them for the extra cost. Great government people think, hmmmmm these people should not be punished for not keeping their word and being responsible so lets not let the banks charge the worst for what they do. Maybe making the regulations look good on paper but its the good people that will always pay. Every law and regulation can be used for good and can be used for bad. Why do you think our courtrooms are full. We need less laws that only the rich and power full don’t have to follow. Same laws for every one. One small example, speeding tickets should be based on persons last year tax returns. A ticket cost me about one weeks pay so why does a rich person only pay about 4 seconds pay for same ticket? not the same….
Report Post »UncleSam1984
Posted on October 29, 2011 at 9:06pmI‘ve worked for three banks and they don’t need to charge the $5 fee. They’re being greedy. On a regular basis (hours & days in most cases) banks aggregate the money from deposits and invest in the market. They can make billions from this. They can operate dozens of high performance computers, with terabytes of memory, running super-algorithms determining the best place to invest your money to get the maximum return. They keep the bulk of the profits and provide a relatively tiny return to their customers.
The consolidation of banks in the past, especially in the 1990s was not a good thing, but it was done primarily to help the Feds control the industry and keep tabs on the customers. The United States would be better off with many more relatively small banks and only a few really big ones.
Banks can profile you based on your financial habits and give it all to Uncle Sam.
YOU HAVE NO PRIVACY AND YOUR LIFE CAN BE PUT INTO THE SHREDDER BY THESE ORGANIZATIONS. Be a good quiet citizen and perhaps, they will leave you alone.
Report Post »TPaine
Posted on October 29, 2011 at 5:33pmMajor banks are now losing business to credit unions. That’s why. I had a SunTrust account which gave me free checking, including a debit card, and on-line bill paying as long as I had direct deposit (and I did, from 3 different sources). The I got a letter in the mail, telling me that there would now be a monthly fee for the debit card, plus usage charges, and I had to keep a certain amount in the account.
So I dumped them and went to the local credit union – free everything, no hidden charges, no monthly fees for anything. And I still get all the benefits. The banks want to start charging for their services, turn to your credit unions. You won’t regret it.
Report Post »Lisa Caroline
Posted on October 29, 2011 at 5:11pmMy husband and I already decided to switch from Bank of America to a local credit union after it was announced that BoA was going to institute the debit card fees in January. A few months ago, they began charging us $12 a month for our checking account, which has been FREE for several years. I was mostly okay with that fee, but another $5 to use a debit card, making our monthly banking fees $17 total per month!? WTF? No thanks! Even if they change their minds and don’t institute the debit card fee, we are switching anyway. A pretty ****** way to recoup losses they have acquired through their poor management!
Report Post »mcmeador
Posted on October 29, 2011 at 12:14pmMy bank implemented the debit card fee, so I just stopped using my debit card. Now I just use my credit card that pays ME to use it via rewards and keep it payed off so that I don’t have to pay any interest.
Report Post »yahoo187
Posted on October 29, 2011 at 11:27amand this is one of the reasons i closed my suntrust account.
Report Post »Dawnwalk
Posted on October 29, 2011 at 10:55amIf they do the fee, they will need bigger atm’s with more money in them. The ones in my town stay empty all the time……hehehe
Report Post »SPOT_OF_TEA
Posted on October 29, 2011 at 10:10amRemember back when Obamacare was being debated,right when things were really heating up,some blue cross company in California raised their rates about 40%,I think on purpose to get people outraged at all insurance companies and support Obamacare…..Now right after this administration uses class warfare to get everyone all worked up about big banks being everyone’s problem,out of the blue,Bank of America introduces debit card fees hoping to get people outraged about bank profits….I think they are all in on it to bring down the system……I think they are told they will be rewarded dearly for their efforts.
Report Post »FLirishPM59
Posted on October 29, 2011 at 9:52amSo basically the Dodd-Frank bill was written to “punish” the banks by demanding they add the fee to debit cards, the banks in turn pass along this “fee” to the consumer and the consumer tells the bank that they’ll go elsewhere. In short, the banks decided that it doesn’t “fit” with their overall business model and essentially “ignore” the “law”. Good for them. It is not the role of the imperial federal government to tell a bank what they can or cannot charge in fees. It’s a business. They are in business to make money. If they charge unecessary fees, the consumer will vote with their feet and go to another bank that doesn’t charge the fee. It’s as simple as that.
Report Post »billwill
Posted on October 29, 2011 at 9:47amI already left Suntrust because of the $5 fee. Went to a local credit union. The banks make enough money already.
Report Post »Qoheleth
Posted on October 29, 2011 at 8:03amThis is actually a good example of market forces. The banks, due to the weight of new regulations were not making money at the same rate they were previously. They had a choice to lay off some employees, cut interest rates, or add some fees. They chose the later. When people began their outcry, some banks that were still only considering fees decided no to do so. That gave them a competitive edge over the others. So, naturally, those other banks rescinded the fees to stay competitive. They’ll take up the slack with the aforementioned lay-offs or reduced interest.
Report Post »The end result is that the market worked. The other end result is that increased regulation will result in lost jobs or lost income. Go figure.
Ronko
Posted on October 29, 2011 at 7:43amShouldn’t be fees in the 1st place, hope it continues until the process goes away completely.
Report Post »Bill Rowland
Posted on October 29, 2011 at 6:54amObumblers regulations and Barney Franks bills are killing small business and large banks. Then we get to bail them out. Don’t you love it?
OMG
Report Post »lukerw
Posted on October 29, 2011 at 2:13amA Bank that offers Free Checks for an Account should be offering a Free Debit Card, because it is the same thing.
Report Post »Warm In The Desert
Posted on October 28, 2011 at 11:42pmThe myriad of responses given as to why each Bank chose to discontinue this policy speaks volumes.
None mentioned they had done market research ahead of time, instead they took the “lets throw it up and see what sticks” approach.
Stay vigilant, as I suspect the next move will be some hidden charge less conspicuous.
Report Post »One Man Progressive Wrecking Crew
Posted on October 28, 2011 at 11:31pmPersonally I don’t understand how anyone can expect to get anything for free when they keep small amounts of money in a bank which they make No interest on. In fact the less money you keep in the bank the more you should pay frankly.
And I’m not rich, bank with Charter One here in Chicago burbs and they’re now hitting us with a fee, but they may re consider due to this development. Either way, I’ll pay it, it‘s worth the convenience of using the bank’s resources when my deposits there are anything but mammoth.
Report Post »qzak491
Posted on October 28, 2011 at 11:29pmIt always amazes me how what the people want usually becomes what the companies or banks want. What’s that called capitalism? Strange how that works.
Report Post »FreedomIQ
Posted on October 28, 2011 at 11:04pmThe backlash is misguided as you don’t get something for nothing. However, these fees and the demise of free-checking began not with bank “greed”, but with Federal Regulations. Your government is responsible for ending free checking. Get it?!
A frightening amount of money and time and resources is being spent by the banking industry just to keep up with the Federal Government’s dictates as well as its future plans for the banking industry. People don’t want to hear that though. It’s easier just to blame the banks.
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