Bank of America is nixing plans to charge customers $5 a month to use a debit card, the latest megabank to retreat from a money-making initiative that mushroomed into a public relations nightmare.
"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," said David Darnell, co-chief operating officer of the Charlotte, N.C.-based bank. "Our customers' voices are most important to us."
Over the past week, SunTrust, Regions, JPMorgan Chase and Wells Fargo all reversed course on implementing monthly fees for customers who use debit cards for purchases. Some banks had begun to charge the fees already; others were running small pilot programs.
Bank of America, however, became a national focal point for customer backlash when it announced a few weeks ago that its new fee would go into effect in January.
The biggest beneficiary of the backlash has been small banks and credit unions that report a surge in customer defections from larger banks.
"When I heard about the fee, it was the last straw for me," said Molly Katchpole, a 22-year-old nanny in Washington D.C., whose online petition urging Bank of America to drop the debit fee captured more than 300,000 signatures. "I'm living paycheck to paycheck and one more fee was just too much."
Katchpole said she already closed her account and moved her money to a community bank. For her, the damage has been done. She said Bank of America's decision won't win her back.
Times wires contributed to this report.