(Updates with company comment in the fourth paragraph.)
Oct. 31 (Bloomberg) -- Regions Financial Corp., the 10th- largest U.S. bank by deposits, will eliminate its debit-card fee for all accounts after customers rebelled against the monthly charge.
The change to the CheckCard service is effective Nov. 1, and all previously incurred fees will be refunded on Nov. 4, the Birmingham, Alabama-based lender said today in a statement.
The change follows similar moves by Wells Fargo & Co. and SunTrust Banks Inc., which rolled back debit-card fees after a backlash from customers and lawmakers. Banks were looking for ways to recover lost revenue after the Federal Reserve capped “swipe” fees charged to merchants at 21 cents per transaction, about half the previous level.
“We have heard from our customers and are responding to their feedback,” John Owen, head of consumer services, said today in the statement.
The rollbacks could put pressure on Bank of America Corp. to rescind its $5 monthly fee imposed on some customers while exempting others who do more business with the firm. The Charlotte, North Carolina-based bank, ranked second by deposits, has been trying to bolster its balance sheet and is counting on internally generated profits plus asset sales to reach its goal.
Wells Fargo said last week it canceled plans to charge depositors $3 a month for debit cards issued by the San Francisco-based company after a five-state test. SunTrust said today it will eliminate a $5 monthly fee for unlimited debit- card purchases in its Everyday Checking account, leaving a $7 monthly maintenance fee in place, said Michael McCoy, a spokesman for the Atlanta-based bank.
The federal cap on fees was mandated by the so-called Durbin Amendment, part of the Dodd-Frank Act’s overhaul of the financial industry.
Debit-card transaction fees paid by merchants are limited to 21 cents, plus 5 basis points of the total, and a conditional 1 cent for fraud prevention, replacing a formula that averaged 1.14 percent of the purchase price, or about 44 cents for a typical debit transaction. The limits may reduce annual revenue at the biggest U.S. banks by $8 billion, data compiled by Bloomberg Government show.
JPMorgan Chase & Co., ranked first by deposits among commercial banks, decided against charging debit-card fees to customers of the New York-based company, the Wall Street Journal reported. New York-based Citigroup Inc. will charge checking customers a $10 monthly fee unless they maintain a $1,500 average monthly minimum balance or make one online bill payment and one direct deposit per month, according to a September statement from the bank.
U.S. Bancorp, ranked fifth by deposits and based in Minneapolis, said Oct. 19 that it has no plans to impose a debit-card fee.
--Editors: Rick Green, William Ahearn
To contact the reporter on this story: Laura Marcinek in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: David Scheer at email@example.com.