SunTrust Backpedaling Debit Card Fees Like JPMorgan Chase & Co.

SunTrust was one of the many banks that thought it was a good decision to charge customers a $5 debit card fee. The idea was idiotic to believe customers would agree with that – especially during a downward economical spiral.

According to the Washington Times; “On Monday, SunTrust Banks became the latest financial institution to stop charging for debit cards, making the move after the new fees proved wildly unpopular with customers.

The bank, which began charging $5 a month for debit cards in June, promised Monday to cancel the fee and return all the money it has collected from customers.

“We believe banking is a relationship business and recognize the importance of responding to client preferences,” said Brad Dinsmore, consumer banking and private wealth management executive at SunTrust. “We’ve listened to our clients’ feedback and will provide the convenience and security of check cards at no additional charge as part of all of our checking accounts.”

SunTrust joins JPMorgan Chase & Co., Wells Fargo & Co., and Bank of America Corp. in backpedaling from earlier plans to respond to government regulations by creating a new revenue source through debit-card fees.

“We knew when we had to increase the fees that it would not be popular,” said Richard Hunt, president of the Consumer Bankers Association. “We had millions of Americans never paying a fee in the first place. Americans are just not accustomed to paying for a checking account or debit cards. There’s a generation of Americans who have never done that.”

Chase tested out a $3 monthly fee in Wisconsin and Georgia, but it said last week the program will end in November and not be expanded to the rest of the country. Wells Fargo has also ended a short-lived, five-state test of charging $3 monthly fees starting Oct. 14.

Bank of America, which made a splash a month ago when it announced a new $5 monthly fee for debit cards, has not backed off but says there will be ways for customers to avoid the fees, such as using direct deposit and maintaining a minimum balance.

“Make no mistake about it: We would never have charged a penny for debit cards had Durbin not interfered,” Mr. Hunt said. “Maybe we should just go to Dick Durbin and ask him how to run a business. Since he’s got all the answers, since the government’s been so good about balancing their budget.”

“When you see banks starting to backpedal, it starts to indicate maybe it was those higher-income consumers that were headed out the door,” he said. “The wrong customers were leaving. If it’s unprofitable customers walking out the door, the fee works. If it’s profitable customers walking out the door, then the bank has a problem.””

Source: WashingtonTimes