Large banks debit-card fees draw political fire- Pushing minorities out?

October 5, 2011

Business, Government/Politics

Bank of America, Wells Fargo and Sun Trust recently announced that they will charge customers a monthly fee to use their debit cards for purchases. Some financial experts are expressing concerns that the fees will push low-income and minority customers out of the banking system. Michel Martin hears from Tell Me More’s regular finance contributor Alvin Hall.

NPR Audio clip:

Wednesday, Oct. 05, 2011

Bank of America’s debit-card fees draw political fire
U.S. Rep. Brad Miller’s bill aims to make account closings customer-friendly

By Andrew Dunn
The Charlotte Observer

Politicians have seized on Bank of America’s newly announced $5 debit card fee, using it as an example of what they consider corporate greed at a time when populist anger against banks and Wall Street is on the rise.

For a second straight day, U.S. Sen. Dick Durbin, D-Ill., railed against the Charlotte-based bank and encouraged customers to switch banks. President Barack Obama, too, has said such fees constitute mistreatment of customers.

And now U.S. Rep. Brad Miller, D-N.C., has introduced a bill aimed at making it easier to leave big banks. He contends that unlike in most industries, banks are able to make it difficult to close accounts even if customers are unhappy with their service.

The eight-page bill, titled the “Freedom and Mobility in Consumer Banking Act,” would guarantee that consumers could close a bank account regardless of balance, prohibit banks from charging a fee to do so and force banks to close accounts within 48 hours of a request.

The bill, filed Tuesday, also would require banks to accept most account closure requests in person, over the phone or electronically.

Bank of America, the largest U.S. bank by deposits, announced last week that many debit card customers would soon have to pay a $5 fee for each month the card is used. ATM withdrawals do not count.

SunTrust also has rolled out a $5 checking account fee, and Wells Fargo and JPMorgan Chase are testing $3 debit fees in some markets.

More than 125,000 people have signed an online petition at asking Bank of America to drop the $5 fee, and complaints have poured in via social media like Twitter and Facebook.

……….Obama has gotten in on the criticism as well. In an interview with ABC News on Monday, he described the new $5 fee as “mistreating” customers and an example of what the financial reform act is meant to curb.

“My hope is, that you’re going to see a bunch of the banks, who say to themselves, ‘You know what? This is actually not good business practice,’ ” Obama said.

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