Major banks, including Bank of America, Chase, Wells Fargo and Suntrust, are under fire for their plans to charge customers a monthly fee to use debit cards for purchases. Bank of America started the trend in August when it announced it would charge $5 per month to customers who use debit cards for purchases beginning in January. Since then more banks have announced fees, and consumer groups have lined up in opposition.
Consumer Union Speaks Out
Consumers Union, the advocacy arm of Consumer Reports, is the latest challenger to bank monthly debit fees. In a letter to Bank of America, Chase, Wells Fargo and Suntrust, CU denounced the fees as revenue generating devices, not cost recovery mechanisms. CU points out a debit transaction costs a bank only 8 cents, and banks are permitted to charge retailers 24 cents each time they process a debit transaction.
Occupy Wall Street Designates Bank Transfer Day
Occupy Wall Street has taken a different approach to fighting bank debit card use fees. The grassroots protest organization designated Nov. 5 "Bank Transfer Day." By that time, it encourages Americans fed up with the banking industry to transfer their money out of big banks and into small local banks and credit unions.
Legislative Initiative Would Ban Debit Use Fees
A legislative initiative is also afoot to take the debit use fee issue out of bankers' hands in one state. Florida Rep. Jeff Clemens, D-Lake Worth, introduced legislation that would ban debit card fees. He points out banks have long pushed for a cash-free economy and now that people are locked in want to impose charges on them for using their own funds.
CPFB Backs Away from Fray
The new Consumer Financial Protection Bureau has the authority to crack down on any "unfair, deceptive, or abusive acts or practices" under the Dodd-Frank financial reform law. President Barack Obama suggested in a recent interview that banning debit fees was the sort of thing the agency was created to do. But the CPFB told The Hill it's not looking at debit fees right now, instead focusing on transparency of bank regulations.
Peoples Savings Bank Protest
Peoples Savings Bank in Urbana, Ohio, has taken a unique approach to reassuring its customers it won't follow the big banks' lead in imposing debit card use fees. PSB not only won't charge its customers for using debit cards, but for the next three months it will pay them $5 each month that they use their cards. In doing so, the bank hopes to draw attention the advantages of banking with community banks.
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