Although the argument can be made that Bank of America's decision to impose a $5 debit card fee may have been a bad idea, it seems the mega-bank is not completely out of touch with its customers.
"Consumers have clearly said this is a no-go," said Patricia Hewitt, who specializes in debit cards at Mercator Advisory Group Inc. in Maynard, Mass., in a recent Wall Street Journal report.
When they originally enacted the debit card fee, Bank of America was met with fierce criticism. However, the bank has listened to its customers and recently announced that it would drop the fee altogether.
As mentioned earlier on The Blaze, this move by Bank of America puts them in the same category as almost every other major bank that publicly announced that they wouldn't pursue the debit card fee strategy.
"We've listened to our clients' feedback and will provide the convenience and security of check cards at no additional charge as part of all of our checking accounts," said Brad Dinsmore, a consumer-banking executive at SunTrust, one of the banks to drop the idea recently.
Likewise, Regions said it is eliminating the fee and will refund fees that already have been charged.
"We have heard from our customers and are responding to their feedback by eliminating the monthly fee," said John Owen, head of consumer services for the bank, in the Journal report.
The Wall Street Journal Reports:
The about-face represents a concession to customer sensitivities over fees. Banks have been adding charges in an attempt to make up for billions of dollars in revenue that is expected to vanish as a result of new restrictions on credit cards, debit cards and overdraft policies.
A provision in last year's Dodd-Frank financial-overhaul law halved the amount that banks can charge merchants for accepting debit cards.
Generally, when revenues are sinking, a business will raise it rates to make up the difference. However, as in Bank of America's case, if customer dissatisfaction is great enough, the business will have to find a different method for generating capital.
That leads to this question: if Bank of America plans to make up for that "billions of dollars in revenue" that vanished with new restrictions, and they found out the hard way that they cannot just impose card fees, how do they plan on raising the money?