Bank of America has decided to “shelve” controversial new fees that could have come into effect at the end of this year, delaying them possibly until late next year.
The second-largest U.S. bank by assets came under fire a year ago when it planned to charge customers who did not meet a minimum balance or used specific services a $5 monthly debit card usage fee. Before the fee was implemented, Bank of America caved to public uproar, including a petition signed by over 300,000 people, and canceled the plan.
The Wall Street Journal reported that the bank hopes to encourage 20 percent of customers, or about 10 million people, who maintain low balances in accounts and don’t use other services to set up monthly direct deposit or other banking products that generate revenue.
Tara Burke, spokeswoman for Bank of America, declined to comment.
The bank is struggling to become a leaner firm and regain growing profitability after recovering fro the financial crisis, including its acquisition of Countrywide Financial’s subprime lending portfolio.
The bank last reported a profit of $340 million for the third quarter, though still down from the $6.23 billion profit from the period a year earlier, after a $2.43 billion settlement related to its takeover of Merrill Lynch. Shareholders had accused Merrill Lynch of misleading investors about the state of its financial health.
JPMorgan Chase, Citigroup, U.S. Bank, PNC Financial, and Key Bank also said at the time they were not planning to charge customers who use debit cards for purchases.
Anthony Polini, analyst with investment firm Raymond James, said the bank continues to struggle with consumer product pricing given a “challenging regulatory and political climate.”
“However, we expect the company to primarily focus on customer service and account retention, with product pricing taking a back seat,” he said.
Polini said he does not expect “any adverse consumer reaction” and applauds the bank “for being sensitive to change in these less than optimal times.”
Molly Katchpole, the woman who started the petition asking Bank of America to cancel its debit card fee plans last year, said she is not surprised the company is considering other plans to charge customers.
Now 23-years old and living in Brooklyn, N.Y., Katchpole said she closed her checking account with Bank of America last year and is a customer of a community bank.
“It’s disappointing. But I guess that’s what you get with a huge bank that doesn’t seem to care about its customer base,” she said.