ATLANTA -- SunTrust Banks Inc. said on Monday that it will stop charging a $5-per-month fee for using debit cards and return the fees that it has collected since June to its customers. The bank followed larger rivals such as Chase and Wells Fargo in backing off the fees, reported the Associated Press.
Last month, Charlotte, N.C.-based Bank of America announced plans to charge $5 per month for using debit cards for purchases. Large financial institutions threatened such fee increases in the wake of interchange fee reform created by the Durbin Amendment to the Dodd-Frank Wall Street Reform & Consumer Protection Act that went into effect October 1 as a way to recoup their losses.
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The retail banking division of New York City-based JPMorgan Chase & Co. let news leak Friday that it will not expand the $3 monthly fees it is charging in tests in Wisconsin and Georgia when they end in November. Wells Fargo & Co. followed on Friday with an official announcement that it is ending tests, begun October 14, of a $3 fee in five states.
While not ending the fees, Bank of America also said it plans to offer ways to avoid the fees through use of services like direct deposit and or maintaining certain balances, but the bank has not officially laid out its policy.
Atlanta-based SunTrust announced that it has eliminated the monthly check card fee on its Everyday Checking account. The fee will no longer be charged beginning Wednesday, November 2, 2011, but all clients who incur--or have previously incurred--the fee prior to that date will receive a full refund, it said.
"We believe banking is a relationship business and recognize the importance of responding to client preferences," said Brad Dinsmore, consumer banking and private wealth management executive at SunTrust. "We've listened to our clients' feedback and will provide the convenience and security of check cards at no additional charge as part of all of our checking accounts."
San Francisco-based Wells Fargo said it is cancelling its planned five-state pilot of a monthly $3 fee for users of its debit cards as a response to customer feedback the bank has received.
"As we adjust to changes in our business, we will continue to stay attuned to what our customers want," said Ed Kadletz, head of Wells Fargo's debit and prepaid cards. "This means understanding their needs as we continue to deliver the world-class service, convenience and value they have come to expect from Wells Fargo."
SunTrust's announcement leaves only Regions Financial Corp. among large banks charging such fees, AP said. Regions began charging $4 per month in October.
Widespread anger over such fees has helped spark a movement that is encouraging bank customers to move their money to credit unions and community banks that don't charge them , said AP. "Bank Transfer Day" is slated to take place on November 5, but neighborhood-based banks and credit unions around the country have already reported sharp increases in account openings ahead of the movement's designated date for switching. Several larger banks, including Citibank, US Bancorp, PNC Financial and TD Bank, have jumped on the issue to highlight that they do not charge debit fees, although they may charge monthly maintenance fees for checking accounts.
Banks pushed the adoption of debit cards in the past decade in part because it is less expensive to handle transactions made with plastic than with cash or paper checks. Debit quickly became popular, and surpassed credit cards as the most popular form of noncash payment several years ago. Usage has continued to increase as the economy has continued to struggle.
But the new federal regulation that kicked in October 1 cut in half the fees banks could charge to retailers for processing purchases made with debit cards. That came on top of other recent restrictions for charging overdraft fees, which soared with automatic overdraft coverage for debit cards and tighter rules on credit cards.
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