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Bank of America yesterday that it is canceling its plans to charge its debit card customers a $5 fee if they use their cards to make purchases. The move comes just a month after the new fee schedule was first announced as a way of compensating for an expected $6.6 billion loss of revenue that all banks will suffer as a result of new financial regulations that limit the hidden and usurious swipe fees that were charged by banks on each transaction.

The New York Times reports that “the reversal follows a huge backlash from customers, one of whom collected more than 200,000 signatures urging the bank to rethink its plan.

“The bank listened, but only after other large banks had indicated that they would not impose similar fees. Wells Fargo, JPMorgan Chase, SunTrust and Regions Financial have all pulled back on their plans ... Wells Fargo said Friday that it was canceling a test that would have imposed a $3-a-month charge on debit card holders in Georgia, Nevada, New Mexico, Washington and Oregon. JPMorgan Chase, which was testing a $3-a-month charge, decided it would not impose a stand-alone debit card use fee. And SunTrust and Regions have both said they would no longer charge the fees.”

While the other banks were testing fee programs, Bank of America became the poster child for what is perceived as a tone-deaf financial services industry.

The banks moving away from new debit card fees were also facing heightened and aggressive competition from smaller banks and credit unions, which were seeing an influx of new customers as they advertised the fact that they were not charging such fees.
KC's View:
We win.

And by “we,” I mean all the businesses and trade associations and even yodelers like me that have been slamming Bank of America and its brethren for the new fees.

I would, however, express one caution. If indeed the banks are going to lose $6.6 billion in revenue, don’t expect that they will go gentle into that good night, simply accepting the fact that they will have less money to invest and hand out in bonuses to senior executives. They are, I’m quite sure, already scheming, trying to find new ways to make up that shortfall. And if they can find a way to make a new program to be both hidden and usurious, so much the better.

So watch your bills, folks.