Last month, Bank of America announced that it will charge a $5 dollar debit card fee. CEO Brian Moynihan is defending the decision, saying that the fees are needed, in part, to recoup billions of dollars to comply with Dodd-Frank law, reports CNBC.
Following the announcement, ABC News quoted Bank of America spokeswoman, Betty Riess, as saying the “economics of offering a debit card have changed with recent regulations.”
ABC News went on to note that banks warned the Durbin Amendment, which is part of the Dodd-Frank financial-rules overhaul, could lead to negative repercussions for consumers.
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The amendment capped debit card transaction, or interchange, fees for merchants at 21 cents per transaction, explained ABC. Before the amendment, debit card companies charged merchants an average interchange fee of 44 cents per transaction.
“I have an inherent duty as a CEO of a publicly held company to get a return for my shareholders” Moynihan told CNBC. He added, “at the same time, I have an inherent duty to do a great job for my customers.”
There are some services, such as ATM withdrawals and online bill pay, that will remain free.
Also, ABC News says the fee will be waived on premium accounts and for Wealth Management/Merrill Lynch and US Trust clients.
The $5 monthly charge does not go into effect until next year. And, ABC quoted Riess as saying the bank will notify customers in writing at least 30 days before applying the fee.
Moynihan refused to disclose whether other bank fees would be raised, CNBC said.
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