Bank of America recently announced a controversial move: it would start charging customers $5 a month to use their debit cards. This, despite BofA’s $6.2 billion quarterly profit.
As far as Bank of America was concerned, it just didn’t have a choice. BofA was being forced into the change as a result of lost revenue from new government swipe-fee regulations.
No one — other than other banks — was pleased, and the debit-card fee generated fierce criticism from customers to consumer advocates to President Obama. Last week, Bank of America started backpedaling, insisting it would offer customers more ways to avoid the fee.
Today, BofA gave up entirely.
Bank of America Corp. is dropping its plan to charge customers $5 a month for making purchases with their debit cards, a person familiar with the situation said.
The move is a dramatic retreat following decisions by several rivals in recent days to drop customer tests of the new fees. SunTrust Banks Inc. and Regions Financial Corp. also said Monday that they will stop charging customers for debit-card transactions.
Bank of America decided against the fees due to negative customer feedback on the plan and the moves by rivals, which left the Charlotte, N.C., lender as the only big bank planning to levy the fee on some customers next year.
The timing of the announcement was probably not accidental — a growing effort to have customers switch to credit unions had marked this Saturday as “Bank Transfer Day.”
So, here’s the question for Bank of America: if the fee was absolutely necessary, and was the unavoidable outcome of those new government regulations, why was it cast aside so quickly in the face of public outrage?
Or put another way, what are to make of weeks of BofA rhetoric, claiming the bank had no choice but to impose this fee?