Two more banks drop monthly debit card fees
— -- SunTrust Bank and Regions Bank have joined the list of banks that have abandoned plans to charge customers a fee for using their debit cards.
Atlanta-based SunTrust said Monday that it has eliminated a $5 monthly debit-card fee scheduled to take effect Nov. 2. Customers who have already paid the fee will be reimbursed, the company said.
"We believe banking is a relationship business and recognize the importance of responding to client preferences," said Brad Dinsmore, Consumer Banking and Private Wealth Management executive at SunTrust. "We've listened to our clients' feedback and will provide the convenience and security of check cards at no additional charge as part of all of our checking accounts."
Regions Bank, based in Birmingham, Ala., said late Monday that it has also eliminated its $4 monthly debit card fee and will refund fees already paid. "We have heard from our customers and are responding to their feedback by eliminating the monthly fee" for debit cards, John Owen, head of consumer services for Regions Bank, said.
On Friday, Wells Fargo announced that it has canceled plans to test a debit card fee in five states. JPMorgan Chase, which has been testing the fee in two states, has decided not to extend the fee when it expires this month, according to a source with knowledge of the plan who isn't authorized to discuss it.
Bank of America hasn't canceled plans to charge a $5 monthly debit card fee that consumers and lawmakers have lambasted it for since the bank announced the fee. Activists have designated Nov. 5 as "Bank Transfer Day" and are urging consumers with accounts at big banks to switch to a small bank or credit union.
"For many consumers, the Bank of America debit card fee was the last straw," said Norma Garcia, manager of Consumers Union's financial services program."
Banks have blamed the new fees on a regulation that took effect Oct. 1 that slashed the fees financial institutions can charge retailers whenever consumers use their debit cards. The regulation exempted banks and credit unions with assets of less than $10 billion.
While most customers will escape debit card fees, banks will likely make up for the lost revenue in other, less visible, ways, analysts say. Free checking, for example, is rapidly disappearing. Only 45% of non-interest checking accounts are free, down from 65% in 2010, according to a survey by Bankrate.com.
Banks "will find some way to increase their revenue, and it's always the consumer that will end up paying for these increases," says Bill Hardekopf, chief executive of LowCards.com.
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