Bank of America Corp. is planning to charge millions of customers a $5 monthly fee to use their debit cards, and other large banks are expected to follow suit.
The banking industry says it needs the fees to recover revenue it will lose because of new federal government regulations taking effect Saturday that cap what they can charge merchants for debit-card transactions.
Bank of America, the largest U.S. bank by assets, disclosed the plan Thursday in a memo to its senior staff.
Several other large banks, including J.P. Morgan Chase & Co. and Wells Fargo & Co., are testing or plan to test similar fees.
New federal limits on debit-card "swipe fees" are expected to cost U.S. banks an estimated $6.6 billion annually in lost revenue.
The limits on debit-card swipe fees were finalized by the Federal Reserve Board in June. The new rules will cap at 24 cents the fee merchants pay banks each time a customer buys something with a debit card, down from the current average of 44 cents. The rules only apply to banks with $10 billion and more in assets.
Bank of America has said it expects the caps, which the industry lobbied against for months, to erase $2 billion in revenue annually.
U.S. Sen. Dick Durbin (D-Ill.), who championed the legislative provision that led to the caps, said in a prepared statement: "After years of raking in excess profits off an unfair and anticompetitive interchange system, Bank of America is trying to find new ways to pad their profits by sticking it to its customers. It’s overt, unfair, and I hope their customers have the final say."
