Last Updated Aug 18, 2011 1:46 PM EDT
The fee is reportedly a response to the Durbin swipe fee amendment, which capped the debit "interchange fee" or "swipe fee" merchants pay banks when customers pay with their debit cards. Opponents of the measure said that loss in revenue would mean banks will be forced to find new ways to make money. "This comes as no surprise to us. It was a forgone conclusion that when the bill passed, this is what would happen," says Richard Hunt, President of the Consumer Bankers Association. "When [the Senate] told banks what they could and could not charge on a product ... we told them consumers would ultimately bear the cost."
Indeed, while not citing the Durbin amendment by name, a Wells Fargo spokeswoman did highlight drops in revenue: "In WFC's earnings announcement we talked about recovering 50% of the lost revenue over time through product changes and volume growth," said Lisa Westermann in an email. "This is one of those ways we are looking at recouping lost revenue ... Our goal is to set a fair price that is consistent with the value of each product or service."
But while Wells Fargo works out what a "fair" price really is, consumer advocates remind us that we have the power to fight this -- and any other new fees that may come our way.
"Sooner or later, stupid bank tricks are going to cause customers to vote with their feet," says Ed Mierzwinski, Consumer Program Director at the U.S. Public Interest Research Group. "Charging fees on debit cards may cause consumers to use debt cards less or cause them to switch to small banks or credit unions -- which would be smart not to copycat the big banks on this one," he tells me.
In fact, an Associated Press/GfK poll from earlier this summer found that that more than 60% of debit card holders would use another form of payment if their bank instituted a $3 monthly fee. Fewer than 40% said they would keep using their debit card.
And consumers do have the power to influence banks: After a wave of outrage, Chase dumped the $5 ATM fee that it was testing in several markets just a few months ago.
Greg McBride, senior financial analyst at Bankrate.com is somewhat hopeful that these fee shenanigans won't spread. "Even as more banks test and institute fees for carrying or using a debit card, the practice will remain the exception, rather than the rule," he says. "Savvy consumers won't put up with it and will move someplace else."
Farnoosh Torabi is a personal finance journalist and commentator. She is the author of the new book Psych Yourself Rich, Get the Mindset and Discipline You Need to Build Your Financial Life. Follow her at www.farnoosh.tv and on Twitter/farnoosh
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