Most recently, Bank of America announced that they will charge a $5 monthly fee for their debit card users. It is unclear who exactly would be impacted and whether using your card as a credit card will negate the debit charge usage fees. But, the Wall Street Journal published an article about the ordeal at the end of September. Needless to say, Bank of America customers are miffed, angered, feeling betrayed, and a lot of them plan to “jump ship.” That can’t be good for Bank of America.
Meanwhile, Bank of America blames the Durbin Amendment. Tim Chen, at US News, clarified what the Durbin Amendment was/is. In a July 2011 article, he wrote:
“Ben Bernanke announced the Fed’s final regulations on the Durbin Amendment. The charges would be capped at 21 cents per swipe, plus 0.05 percent of the transaction, with the possibility of an additional cent if banks comply with fraud prevention procedures. His decision was far more favorable to banks than expected: the average transaction of $38 would garner a swipe fee of 24 cents, double the initial proposal.
The ruling pleased no one. Banks and credit unions fought the mere existence of the Durbin Amendment, while retailers and merchants accused the Fed of caving in to pressure from the financial industry. Bernanke acknowledged that banks had increased the fees on checking accounts, but said that retailers in competitive markets would pass the savings on swipe fees onto their customers. All in all, he was “unsure” if the Durbin Amendment would be a net gain for consumers.”
I encourage you to read more of his article because the timeline he lays out is extremely helpful. The Durbin Amendment’s fee limit went into effect on October 1st.
Five House Democrats wrote to Attorney General Eric Holder asking him to get the Department of Justice to investigate whether the Banks and their trade groups are in collusion with each other in regards to fees.