Bank of America Customers Upset Over Debit Card Fee

COLUMBIA, S.C. (WOLO) — More than 130,000 Bank of America customers have signed a petition in anger over the company’s decision to start charging $5 dollars per month for debit cards. “The land of the free is slowly disappearing, services people used to get for free are disappearing,” says Timothy Koch, Finance Professor at USC. Timothy Koch, a finance professor at the University of South Carolina and a community bank advocate, says legislation played a role in Bank of America’s new debit card fee. “Congress passed the Dodd-Frank legislation, part of which was the Durbin amendment. It stipulated that the feds got to set interchange fees for banks so when a customer uses a debit card it used to be a market set price at which the banks got compensation, now the feds have set that price,” says Koch Bank of America recently announced they would charge debit card uses $5 per month. Customers are angry, but Koch says they have options. “Switch to a credit card, a pre-paid card, I’m not really a fan of carrying around a lot of cash, it’s dangerous, or change financial institutions,” says Koch. That’s exactly what some of the 130,000 people that signed the ‘Tell Bank of America: No $5 Debit Card Fees’ petition, are threatening to do. In the petition customers say the bank was bailed out during the financial crisis a few years ago. They go on to site the banks current profits and then ask why the bank wants to squeeze another $60 from customers? Koch says it’s simple. “The industry is going to lose somewhere around 6.5 billion dollars in revenue, to Bank of America is trying to recoup their lost revenue,” says Koch. Other big banks already have pilot programs for their debit card users, something Koch says, is a sign of the future. “Over time you are going to have to pay a fair price for the services and everybody is going to have to cover their costs and I would be very surprised in five years from now, if the fee structure stays the same, that other banks are not charging for debit cards,” says Koch. There is some good news, if you use your debit card at the ATM, you will not be charged. Also, if you have a state-issued pre-paid debit card in South Carolina, that’s used for unemployment benefits you will not be charged.