Bank of America, the country’s largest bank, announced yesterday that it plans to initiate a $5 monthly fee for debit card purchases. The new rule takes effect Saturday.
Bank of America is following in the footsteps of other banks, like Chase and Wells Fargo, who began charging customers monthly debit card usage fees. Though Bank of America is the latest national bank to incorporate these charges into their transaction fees; they rank among the most expensive, with other banks charging $3 monthly fees.
This new rule is a cause-and-effect stipulation of the Dodd-Frank financial overhaul law that was enacted in July 2010 to curb the loss of $5.6 billion in revenue from new rules that restricted overcharge fees.
While customers will realize an impact on their bank accounts to the tune of $60 a year, merchants are less likely to notice a fluctuation in sales, as the new regulation caps the fees they can charge merchants for processing a debit transaction.
Bank of America customers are not responding well to the new restrictions. Senator Dick Durbin of Illinois issued a statement that reads, in part: “Bank of America is trying to find new ways to pad their profits by sticking it to its customers.”