JP Morgan Chase and SunTrust Pull Back on Debit Card Fees

A number of national bank institutions have decided to pull back on their controversial debit card fees after receiving backlash from customers. The monthly fees, some as high as $5 for use of debit cards, have already been eliminated by some banks while others are strongly considering the option.

Debit Card Fees Rub Customers in the Wrong Way

National banks, including Bank of America, Wells Fargo, JPMorgan Chase and SunTrust all announced their intentions to implement debit card fees for customers who chose to use their debit cards each month.

This new fee was said to be imposed as a way to compensate for the 21-cent cap placed on interchange fees (the fees paid between banks and retailers for the acceptance of card-based transactions) as determined by the Durbin Amendment portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

As more large banks announced the implementation of  debit card fees, banks faced explicit discontent from new and long-standing customers. The resistance against debit card fees resulted in some banks deciding not to add their own fees, including US Bancorp and Citi.

Many loyal big-bank customers have threatened to jump ship due to the fees, causing some major banks rescind their intent on charging debit card fees.

Eliminated Debit Card Fees May Show Up Elsewhere

Most national bank institutions that said they would charge monthly fees have decided to eliminate them to avoid losing customers. For instance, SunTrust, a large regional bank based in Atlanta, announced on Monday that it will no longer charge $5 a month for debit card purchases starting Wednesday. The same day, Alabama-headquartered Regions Bank said it would abstain from charging its $4 monthly fee. Both banks plan to refund customers who have been charged.

JPMorgan Chase, on the other hand, has decided not to implement its fees, while Wells Fargo called off its pilot program, which charged $3 monthly for debit use. The only major bank that has not eliminated fees completely is Bank of America, which says it is weighing proposals to help customers avoid its $5 monthly debit use fees.

However, while banks have eliminated their fees, experts say it is not yet time to rejoice, as most institutions will likely find a way to recoup their lost revenue through stealth fees. In other words, banks may charge customers who want to receive paper statements or use a teller for transactions. They could also charge customers who don’t use their accounts enough or fail to maintain a specified minimum account balance.

It is recommended that customers of major banks pay attention to their statements to look for these stealth fees, which are often hidden. Doing so can help ensure they are aware of how much they are being charged for checking account use each month.