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BofA Ditches $5 Fee

Bank of America has canceled plans to impose a $5 monthly fee on debit card customers. The fee immediately drew criticism when it was announced in late September. It got the attention of Congress, and President Obama. Still, Bank of America CEO Brian Moynihan went on CNBC in early October and defended it. "We know our customers, we know the choices we give them. We have 50 million of them, and we listen to them all the time," Moynihan said. And it's the voices of customers that BofA says convinced the bank to change course. More than 300,000 people had signed an online petition against the fee. It was going to take effect in 2012. The fee was intended to make up for lost revenue resulting from new caps on what banks can charge retailers for debit card purchases. UNC-Charlotte banking professor Tony Plath says it's unusual for big banks to change their minds on fee increases, but he wasn't surprise after reading reports of community banks and credit unions gaining customers in response to the $5 fee. "In this case, it seems like we've had an attitudinal shift in the industry where people are just dissatisfied and fed up with big banks," Plath says. The debit fee announced by the big banks, in particular Bank of America, just pushed people over the edge, and they're switching banks." The decision comes shortly after competitors JP Morgan Chase and Wells Fargo canceled pilot programs for a monthly $3 dollar fee on debit card users in some markets. In addition, SunTrust Bank has canceled its $5 monthly fee that been in place since June and will return those fees to customers