By Jim Donovan: Chase and Wells Fargo are joining the list of banks that won’t be charging customers to use their debit cards, as the backlash over Bank of America’s planned $5 monthly fee continues.
In fact on Friday, Bank of America bent. A source at the bank, who asked not to be identified because the policy is still evolving, said it likely it will offer ways for its customers to avoid debit card fees through using direct deposit, maintaining minimum balances or using Bank of America credit cards.READ MORE: Fired-Up Sixers Fans Pack Wells Fargo Center For Home Opener
The whole controversy started when Bank of America announced it planned to start charging $5 per month for use of debit cards beginning next year. Other banks soon followed with similar plans, yet they now appear to be backing down.
Chase will stop charging $3-per-month fees for using debit cards when its current pilot in Wisconsin and Georgia is completed in November. And it’s not alone in rethinking its actions. Wells Fargo began a similar pilot in five states on Oct. 14, testing a flat $3 fee for using debit for purchases. On Friday it also announced that it is cancelling its test program.READ MORE: Student Shoots Himself In Leg Inside West Philadelphia School With Metal Detectors, Police Say
Banks are justifying the fees by stating that they need to recoup revenue lost to new regulations that limit the fees they can collect from retailers for handling debit card transactions. But the new fees sparked a huge backlash.
Credit unions and community banks nationwide are reporting huge spikes in new accounts as consumers seek no-fee options. The backlash hasn’t gone unnoticed by other banks.MORE NEWS: Man Shot, Killed Inside West Philadelphia Corner Store, Police Say
Citigroup almost immediately pointed to its policy of not charging for debit, although at the same time it changed requirements for its mid-tier checking accounts to make it harder to avoid a $20 per month service fee. While Huntington National Bank, Ally Bank, USAA and TD Bank, are among those that are publicizing that they will not charge debit card fees.