Anger Grows Over Debit Card Fees

Anger Grows Over Debit Card Fees

Bill Hardekopf
Forbes.com
Oct. 20, 2011

People are angry at the proposed debit card fees and nearly one-in-three consumers say they will take their money elsewhere.

According to a new study by The Research Intelligence Group, 30% of banking customers say they will leave their institution should the bank start charging a monthly fee for debit card use. This anger is even more pronounced with younger (35%) or more affluent (37%) consumers.

Another 43% of consumers said they would choose a different method of payment. 28% said they would pay by cash, while 15% claimed they would use a credit card.

Regions and SunTrust have already started assessing a monthly fee on debit card usage. Bank of America will begin charging a $5 per month fee in 2012. Chase (one state) and Wells Fargo (five states) are testing this fee in various areas.

The survey was performed by The Research Intelligence Group from a representative sample of 1,000 U.S. adults in early October.

Consumers do not like paying a monthly fee for using their own money. These fees are also being assessed by some banks that we, the taxpayers, bailed out a few years ago.

Lawmakers are also upset.

After Wells Fargo announced a 21% increase in their third quarter profits, Senator Dick Durbin sent a letter asking the bank’s CEO to explain the need for a new debit fee. Durbin had previously sent a letter to Bank of America, reprimanding the bank after it announced plans to charge consumers for debit card usage.

Bye-Bye, Banks: 9 Tips Before You Switch to a Credit Union

Matt Gutman and Enjoli Francis
ABC News
Oct. 24, 2011

The more than 7,000 credit unions across the country are seeing an explosion in new members since Bank of America announced its monthly $5 debit fee in September.

In Miami, Karen Jackson transferred her money from a Chase account to the Miami-Dade Credit Union. She said the continuous adding on of fees had disgusted her.

"We couldn't take it anymore," she said. Recent numbers show there are thousands like her.

The Navy Federal Credit Union, the world's largest credit union with $46 billion in assets and 3.8 million members, says it welcomed thousands of new customers last week -- a threefold spike in new checking accounts since this time last year.

"In our experience, this is new," Karen Tyson, the National Association of Federal Credit Unions' senior vice president for marketing and communications, told ABC News. "This is a different phenomenon. There seems to be quite a bit of distrust, quite a bit of apprehension, quite a bit of frustration among the average Americans out there with the larger institutions and the Wall Street institutions."

Scott Arney, the chief executive officer of the Chicago Patrolmen's Federal Credit Union, said deposits had been pouring in.

"In October, we're on pace to go about 40 percent above that in new checking account and debit card activity," Arney said.

But before you go out and transfer your money to a credit union, here are nine tips from the Credit Union National Association:

Find a credit union you're eligible to join. Credit unions serve people according to where they work, where they live or worship, or other associations they might belong to.

Use these tools to find a credit union. These sites -- www.aSmarterChoice.org and www.CULookup.com -- help you find out what you need to know.

Compare credit union rates and fees to those of banks. The Credit Union National Association estimates that consumers annually save more than $6 billion in better rates and lower fees by using a credit unions rather than banks.

Ask about free checking and debit. About 80 percent of credit unions still offer free checking, and more than 70 percent have debit card programs, typically with no fees, according to the Credit Union National Association.

Check if the credit union has all the products you're looking for. These days many credit unions offer most of the same services and products you'd find at a bank -- mortgages, credit cards, IRAs, home equity lines, even small business loans.

Consider the convenience factor. Credit unions have fewer branches, but today thousands of credit unions share their branch facilities, so that members of one credit union can use the shared branch networks of other credit unions. And today many credit unions are part of nationwide ATM networks.

Ask about deposit insurance. Nearly all of the 7,500 credit unions in the U.S. are federally insured, meaning their deposits are insured up to $250,000 by a federal deposit insurance fund administered by the National Credit Union Administration, just as the FDIC does for banks.

What about electronic services? Credit unions pioneered the concept of direct payroll deposit. But today many credit unions offer a range of electronic banking services.

Ask for a "switch kit": Many credit unions have switch kits, a compilation of all of the forms, rules and suggestions you may need to make your switch as seamless as possible. Just ask the credit union you want to join for its switch kit.

The National Association of Federal Credit Unions' Tyson said the main myth she hoped to dispel was that it was hard to move from banks to credit unions.

"It's not hard to change," she said. "It's a quick process. You can do it online. Find one that works for you. ... It's a piece of cake."

Lawmakers are also upset.

After Wells Fargo announced a 21% increase in their third quarter profits, Senator Dick Durbin sent a letter asking the bank’s CEO to explain the need for a new debit fee. Durbin had previously sent a letter to Bank of America, reprimanding the bank after it announced plans to charge consumers for debit card usage.

What the fuck do they expect? The Democrats brought this shit on and them alone. Period. End of story.

Here's the answer.......

Thank Dodd-Frank For Your Debit Card Fees

Investor's Business Daily Editorial
Oct. 3, 2011

Damned as an "outrage" in the press, Bank of America's just-announced $5 monthly fee for ATM use was a logical and predictable result of a Dodd- Frank financial bill that fixed prices. Guess who gets to pay for it?

Throwing their weight around at the height of the banking crisis, House Financial Services Chairman Barney Frank of Massachusetts and Sen. Chris Dodd of Connecticut vowed to stick it to banks. They blamed them for the mess to cover up the fact that they forced banks to lend to favored constituencies who could not repay.

The two Democrats pushed through the much-vaunted Wall Street Reform and Consumer Protection Act, which President Obama signed and touted as one of the signature accomplishments of his presidency.

That act, which included a micromanaging amendment on fees, carried a $2.9 billion implementation cost for that alone over five years, according to the Government Accountability Office.

It was nothing but the same old pandering to special interests. Named after Illinois Democratic Sen. Dick Durbin, the amendment limited fees that banks can collect from sellers when their customers make debit card purchases - cutting 44 cent fees to 21 cents.

That little bomb is now why battered Bank of America has no choice but to impose a $5 monthly fee - $60 a year - to consumers to make up for lost revenue.

The "economics of offering a debit card have changed with recent regulations," a bank spokeswoman told ABC News Friday.

BofA says it stands to lose $2 billion from the arbitrary Durbin price-fixing amendment and now has no choice but to make up for the lost revenue some other way.

Now that consumers will be stuck with that fee, they can thank Dodd, Frank and Obama for that special little spike in inflation tailored just for them.

Other banks, by the way, might follow. And like banks, consumers may respond in a way that is logical to their interests, too.

As banks are forced to impose fees, it would not be surprising if some consumers responded by moving to a cash economy - the kind they have in places such as Argentina and Zimbabwe, where government meddling has trashed the banking system.

That's what happens in all economies where a government attempts to legislate the transactions of willing buyers and willing sellers and impose its own vision of what prices for particular transactions should be.

And in the end, it's always the people at the bottom of the economic food chain who get it - consumers.

Which is interesting because Democrats claimed to be standing up for the little guy with this "reform." "American taxpayers, many of whom were significantly harmed by the financial crisis, would have shouldered none of the burden for implementing the legislation," Frank promised.

In those palmy days of 2010, the Democratic line was straight out of the Gilded Age: Banks are thieves. Wall Street vs. Main Street. Union thugs invading branch banks and busing in baying mobs to the home lawns of bankers.

Now the reality is here: Democrats' rabid intervention in market mechanisms is pushing costs onto consumers. Like taxes, fixing prices always passes costs down to the little guy. Until Democrats understand this, banks should be identifying the $5 charge as the Dodd-Frank-Durbin-Obama fee.

,

TexasBlue wrote:

Lawmakers are also upset.

After Wells Fargo announced a 21% increase in their third quarter profits, Senator Dick Durbin sent a letter asking the bank’s CEO to explain the need for a new debit fee. Durbin had previously sent a letter to Bank of America, reprimanding the bank after it announced plans to charge consumers for debit card usage.

What the fuck do they expect The Democrats brought this shit on and them alone. Period. End of story.

The first thing that pisses me off is the citing the increase in Citibank profits with absolutely ZERO context! So what? Their profits went up 21%. Is that net or gross? Is that from a negative to a less negative loss? We don't know because the author fails to note it! It's misleading or shoddy reporting. Why am I not surprised?

The second thing not mentioned here is the fact that it is the Dodd-Frank bill that is dropping the hammer on bank profits sending them scurrying to find ways to offset the massive losses that that bill imposes on them. This just more of Obama's war on capitalism and the private sector.,,,,