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Bank of America to drop plans for $5 fee

By Hugh Son
Bloomberg News / November 1, 2011

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Bank of America Corp., the second- biggest U.S. lender by deposits, dropped plans to charge a $5 monthly fee for debit cards after a nationwide backlash from customers and lawmakers.

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer, said in a statement from the Charlotte, North Carolina-based lender today. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

Bank of America reversed course after competitors including Wells Fargo & Co., the No. 2 debit-card issuer, decided not to charge similar fees. Atlanta-based SunTrust Banks Inc. and Regions Financial Corp., based in Birmingham, Alabama, said yesterday they will eliminate their check-card fees after customers rebelled.

Card issuers have been seeking to replace revenue lost after the U.S. capped fees on debit-card transactions earlier this year. The limits, mandated by the Dodd-Frank Act, may cut annual revenue by $8 billion at the biggest U.S. banks, according to data compiled by Bloomberg Government.