Ouch. Looks like you BofA customers that always brag about how marvelous your bank is might want to start looking elsewhere. Ha! (I’m gloating, yes. My bank is small and relatively unknown because it’s only in NJ but it is AMAZING and I guarantee you it has better features than yours! Hehe.) Bank of America will now charge $5 a month to debit card holders who make purchases with their cards. Don’t fret just yet though. You have a little time to either deal with it or find a new bank, as the change doesn’t go into effect into 2012. More details below.
You can thank new Dodd-Frank regulations on debit cards for the $60/year fee.
It takes effect in early 2012.
According to an internal memo sent to the bank employees today that is cited by Dow Jones, “The fee will apply to various consumer checking accounts but will not apply to customers in certain premium accounts.”
Sounds like if you keep a certain amount of cash in there, you’re home-free.
Other banks will do something similar (remember JPMorgan considered $5 ATM fees), because the Durbin amendment to the Dodd-Frank financial reform act, the reason for the profit loss on debit cards, applies to all U.S. banks that issue debit cards.
“The economics of offering a debit card have changed with recent regulations,” a spokesman for BofA said.
The Durbin amendment ruled that debit interchange fees would be capped at 12 cents plus 0.05% of the transaction, with the possibility of an additional cent if certain criteria are met.
Right now, other banks’ plans to make up for the loss appear to still be in testing stages. JPMorgan Chase and Wells Fargo are currently testing $3 fees for debit cards in select areas, and Citibank recently announced it is raising its fees for checking accounts, according to Mercury News.
Banks fought (lobbied) hard NOT to have to comply with this rule — and thus, not to charge their debt card holders an additional $5 fee. They lost the fight this summer.
The (relative) good news is that Bank of America won’t start charging customers in October, right when the Durbin rule starts affecting their profits. Debit card holders have a few extra months to enjoy free debit card usage.
