Bank of America Does a 180 & Decides To Not Charge For Checking Accounts

Bank Of America cancels $5 checking account fees

Bank of America may have gone back on its plans to charge a fee on customers’ debit cards, but the damage may already be done. The bank in September announced plans to charge five dollars per month for customers to use their debit cards, but after a large and nationwide outcry against the plan the bank announced it “listened to our customers” and dropped the fee.

It seems Bank of America’s customers still feel the sting of the plan, though. A poll conducted by Harris Interactive found that 9 percent of Bank of America’s customers said they are “not at all likely” to continue using it as their primary bank in the future. Another 12 percent rated the bank poorly at ensuring a trustworthy relationship with its customers, and 15 percent said the bank is poor at valuing them as a customer.

Bank of America was not alone in its plans to implement fees for debit card use. JPMorgan Chase and Wells Fargo also made similar plans, but they too abandoned the fees in the face of customer criticism. The banks claimed that recent Wall Street regulations imposed by Congress slashed their profit by lowering the fees they could charge retailers who accept debit cards. The fee on debit cards helped make up the difference and ensure the bank would still profit, officials from Bank of America said.

Polls taken at the time of Bank of America’s fee announcement suggest that the current fallout could have been much worse had the bank gone through with the change. A survey conducted in October by Research Intelligence Group found that more than 30 percent of all consumers said they would leave their bank if debit card fees were imposed, and more than 40 percent said they would stop using the cards entirely.

Perhaps no bank has been as affected by the Occupy Wall Street movement as much as Bank of America, and few others have drawn the same ire for taking $45 billion in the government bailouts of 2009. An earnings report that showed Bank of America took in $6.2 billion during its third quarter, even as it proposed new fees, added to hostility. Several local branches of the Occupy protest specifically targeted the bank, picketing in front of local Bank of America branches and encouraging its customers to leave for the smaller local credit unions.

The actions against Bank of America and other large banks are likely to continue, with a “Bank Transfer Day” planned for early November and protests in cities like Providence, R.I., and Oakland, Calif., planning further demonstrations against the bank. Even Pres. Obama spoke out against Bank of America, telling ABC News that the debit card fee proposal demonstrated a need for a Consumer Financial Protection Bureau to guard against such practices.

The protests and outcry against new fees have paid off for some banks. The Credit Union National Association estimates that 650,000 people have joined credit unions in recent weeks—with a 23 percent increase in new accounts alone the weekend after Bank of America’s debit card fee announcement. Credit unions, which are owned and controlled by their members, have also received positive marks from consumers compared to Bank of America and its large counterparts. In the Harris Interactive survey, 73 percent of those who bank at credit unions said they are very or extremely satisfied with their bank, compared to 27 percent for Bank of America, 31 percent for JP Morgan Chase and 34 percent for Wells Fargo/Wachovia.