Big banks decide against debit fees, Big Banks Say No to Debit Fees, Won't Follow Bank of America's Lead. JPMorgan Chase has decided it will not charge customers who use their debit cards for purchases, joining a growing list of banks that will not follow the lead of financial giant Bank of America, which announced a $5 monthly fee last month.
JPMorgan Chase, Citigroup, U.S. Bank, PNC Financial, and Key Bank have confirmed they are not planning to charge customers debit card fees when they make purchases.
JPMorgan Chase, the largest bank in the country by total assets, began testing a $3 fee in parts of Wisconsin and Georgia in February. However, the bank decided it won't roll out the fee to the rest of the country, as first reported by the Wall Street Journal.
A person familiar with Chase confirmed with ABC News that it is not planning to charge debit card fees due to customer preferences.
Many in the banking industry had warned that higher fees to consumers would follow the Dodd-Frank's Durbin Amendment, which went into effect on Oct. 1. The amendment capped debit card interchange fees for merchants at 21 cents per transaction earlier this year. Before the amendment, debit card companies charged merchants an average interchange fee of 44 cents per transaction.
Bank of America, the second-largest bank in the country, announced at the end of September that it will charge a $5 monthly debit card fee starting early next year. The announcement led to outcry among consumers, including a petition against Bank of America's plans. The petition had over 153,000 signatures from irate customers across the country.
The bank has said the reasoning behind the change was that the "economics" of offering a debit card have changed with recent regulations.
Bank of America CEO Brian Moynihan told ABC News earlier this month that the fee "is meant to provide great service" and that customers with a balance greater than $5,000 will be exempt.
Wells Fargo began testing a $3 "activity fee" on Oct. 14 with customers in Georgia, Oregon, Nevada, New Mexico and Washington making a purchase or payment with their debit card, according to spokeswoman Richele Messick.
However, many national banks offer checking accounts without fees. Smaller, community banks and credit unions have touted those services and free debit card services. The more than 7,000 credit unions across the country have seen an increase in new members since Bank of America announced its fee.
Internet banks are also alternatives for customers who are heavy debit-card users. Ally Bank and Charles Schwab Bank offer customers free debit cards and checking accounts with interest. Both banks also reimburse ATM fees charged by other banks nationwide and offer unlimited check writing. banks against debit fees, J.P. Morgan chase debit fees, US Bank shuns debit fees, BoA $5 debit fee
Many banks have said their fee-free plans were not related to the backlash against Bank of America over its debit card fee announcement.
Citibank announced it was not planning to charge debit card fees on Sept. 16, based on customer feedback.
"The main reasoning behind it is our customers told us it would be a huge source of irritation," Catherine Pulley, Citibank spokeswoman, told ABC News.
Source:abcnews
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