Friday, October 28, 2011

Banks get credit: No debit fees (Politico)

Following President Obama and Senator Dick Durbin?s (D-Ill.) attacks on Bank of America?s new debit card fees, most other major U.S. banks have decided against imposing similar charges.

Following a lengthy consumer testing trial, J.P. Morgan Chase has decided not to impose debt card fees, according to the Wall Street Journal. Morgan Chase is the third largest bank in terms of debit-card market share by purchase volume, with 14.8 percent.

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U.S. Bancorp, Citigroup, PNC and KeyCorp, other large American banks, have also said that they will not introduce new debit card fees, although none of them have admitted to being influenced by the public outcry against Bank of America.

It?s hard to imagine, however, that the criticism from Obama and widespread outrage that followed Bank of America?s announcement did not play a role in keeping smaller banks from announcing their own fees.

Bank of America announced a new $5 monthly fee on debt cards in September, a development that was greeted with public dismay. Wells Fargo also announced that it was testing its own $3 monthly debit-card fee in five states. Together, the two banks make up 40.5 percent of the debit-card market by purchase volume.

Obama recently slammed debit-card fees, arguing that government should be able to stop its implementation.

?Well, you can stop [the fee] if you say to the banks, ?you don?t have some inherent right just to, you know, get a certain amount of profit if your customers are being mistreated,?? Obama said.

Durbin went a step further, and urged customers to close their Bank of America accounts.

?Bank of America customers, vote with your feet, get the heck out of that bank,? Durbin said earlier this month. ?Find yourself a bank or credit union that won?t gouge you for $5 a month and still will give you a debit card that you can use every single day. What Bank of America has done is an outrage.?

Bank of America claims that the Dodd-Frank financial regulations passed in 2010 pushed them to implement a $5 monthly debit-card fee.

The Durbin amendment to the Dodd-Frank bill limited banks to a charge of 21 cents for each debit card transaction. Previously, banks would charge an average of 44 cents per swipe.

Source: http://us.rd.yahoo.com/dailynews/rss/politics/*http%3A//us.rd.yahoo.com/dailynews/external/politico_rss/rss_politico_mostpop/http___www_politico_com_news_stories1011_67068_html/43420199/SIG=11m4tvfss/*http%3A//www.politico.com/news/stories/1011/67068.html

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