The fee will apply to customers with various checking accounts during any month they use their debit card to make a purchase. The fee will not apply to customers who do not use their debit card to make a purchase or who only use it to make ATM transactions. The fee also will not apply to customers in certain premium accounts.
Bank of America is trying to cushion revenue losses it expects to incur from new caps on the fees merchants pay when a customer uses a debit card at their stores. In June, the Federal Reserve Board finalized rules capping such fees at 24 cents per transaction, compared with a current average of 44 cents.
Other banks have introduced or are testing new fees in response to the debit-fee caps, which stem from a provision known as the Durbin amendment in last year's Dodd-Frank financial regulation overhaul legislation.
The moves illustrate the unintended consequences that tend to develop from "well meaning" regulation. The Durbin amendment ostensibly was an attempt to "protect" consumers and retailers from "high transaction fees." But the rules also represent an immediate $6.6 billion reduction in bank revenue.
So what will the banks do? Raise other fees to recoup the losses. Retailers might still be happy to pay the lower transaction fees. But the shortfall will be made up directly by customers.
BofA to Charge Debit-Card Fee - WSJ.com (subscription required)
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