Credit Scores and Reports

More banks back away from debit card use fees


More banks are backing away from charging customers to access their own money with debit cards, including Wells Fargo, SunTrust and Regions Bank

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See updated story:  Bank of America reverses course, drops controversial debit card fee.

The list of banks backing away from charging customers debit card use fees has grown amid continued public outcry and a campaign urging customers to switch banks in protest of the fees.

Wells Fargo abruptly yanked the $3 monthly debit card use fee it began testing just two weeks ago in five states.

“The program was pulled Friday,” Wells spokeswoman Lisa B. Westermann, confirmed in an email. “No customer ever received the fee because the pilot just began Oct. 14.” The bank posted its decision on its Facebook page late Friday and got a flood of comments from followers.

SunTrust Bank, which launched a $3 debit card fee for “Everday Checking” account holders in June 2011, issued a statement Monday rescinding the fee, effective Nov. 2, 2011. “All clients who incur — or have previously incurred — the fee prior to that date will receive a full refund,” according to the statement. “Clients will not need to take any action to receive their refund. It will automatically take place in the next 30 days.”

Said SunTrust executive Brad Dinsmore: “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.”

Regions Bank joined in on Monday, announcing the end to its debit card fee and a rebate of fees paid. “We have heard from our customers and are responding to their feedback by eliminating the monthly fee for CheckCards,” said John Owen, head of customer services for Regions Bank.

Customers urged to switch accounts
None of the banks will confirm how many customers they may have lost because of the fees. A growing sense of anger among consumers had many looking forward to Nov. 5 — dubbed Bank Transfer Day by activists — when account holders at major financial institutions were urged by grassroots organizers to switch their accounts to smaller community banks and credit unions.

Bank of America was the first major bank to announce a full-scale rollout of debit card fees. The bank revealed in September that, starting in early 2012, it would begin charging $5 in any month that certain customers used their debit cards to make at least one purchase. Customers with premium accounts that maintain high average daily balances or those with BofA mortgages are exempt from the fee. Since its initial announcement and the wave of criticism and anger it caused, the bank is reportedly now considering ways to make more customers exempt from the fee. Bank of America did not respond immediately for comment.

BofA’s major competitors — Chase, Citi and PNC — all said last week they would not charge debit card fees. Citi instead increased monthly checking account fees.

Consumer groups are continuing efforts to lobby banks to back off of fees.

“It’s time for Bank of America to join other major banks and drop its plan to charge a monthly debit card fee,” Norma Garcia, manager of financial services programs for Consumers Union, said in a statement. “For many consumers, the Bank of America debit card fee was the last straw. They’re fed up with banks that got billion dollar bailouts that are now sticking customers with new fees.”

Asked if Wells Fargo will instead charge customers some other types of fees to make up for lost merchant interchange fee revenues, Westermann replied: “We will not speculate about future fees.”

I was not looking forward to switching banks. It would have been a major pain in the rear but I drew a line in the sand and if you charged me for using a debit card, after nearly 20 years … I was going to switch.

— Michelle Arteaga
Self-described Wells Fargo customer,
in a comment on Facebook

Dropped fee causes glee
On Wells Fargo’s Facebook page, customers expressed both appreciation for cancellation of the $3 test program — which ran in Georgia, New Mexico, Nevada, Washington and Oregon — and continued ire that a fee was ever considered.

“Thank God!!!” wrote Nichele Mims. “Finally, a company that’s listen[ing] to customers!!!”

“Of course you would cancel it after I switched banks!!!!,” Joshua Steven. K Hulsey wrote.

“I was not looking forward to switching banks,” wrote another customer, Michelle Arteaga. “It would have been a major pain in the rear but I drew a line in the sand and if you charged me for using a debit card, after nearly 20 years with [Wells Fargo], I was going to switch.”

And this from Shannon Barrett Chastain: “Well, I suppose it took thousands of accounts to close before you would agree to cancel that fee. Too late though, I ended up switching before you could charge me. I am at a free local bank with no charges, ever! You should have never considered charging your customers, guess the customers had to teach you a lesson, without us customers you would have no bank! Next time think about your customers first before your pocket!”

See related:Chase, other banks won’t charge debit card usage fees, Poll: 2 out ot 3 debit card users will stop swiping cards if banks charge usage fees, 9 ways to avoid new debit card use fees, Banks add new $3 fee for accessing your own money

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