published Tuesday, November 1st, 2011

First Tennessee and Bank of America join major rivals in reversing hated debit fees

  • photo
    A customer uses a Bank of America ATM in Charlotte, N.C. When Bank of America starts charging customers a $5 monthly fee in 2012 to swipe their debit cards, the 38.7 million people who carry them will have to decide if the convenience is worth the money.
    Photo by Associated Press /Chattanooga Times Free Press.

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First Tennessee and Bank of America joined rivals SunTrust and Regions Bank in rolling back the unpopular debit fees that trace their lineage back to the Durbin Amendment of the Dodd-Frank Act.

“Given the fact that the competitive market has changed, we are canceling the implementation of the debit card fee,” said Jack Bradley, executive communications manager for First Horizon, the holding company for First Tennessee.

Keith Sanford, market president for First Tennessee, said the decision wasn’t a concession to popular protests that were spurred by the fees, but instead was an acknowledgment that First Tennessee couldn’t stand alone when its competitors had eliminated the monthly fee.

“We still have to make up for the the losses from the Durbin Amendment somehow,” Sanford said. “Right now, it’s just going to be a hole in our budget.”

First Tennessee first communicated the rate hikes in September, charging customers up to $3 each month if they used their debit card.

Bank of America’s David Darnell, co-chief operating officer, said the Charlotte, N.C.-based bank was reversing its earlier position in response to customer feedback and the changing competitive marketplace.

The bank won’t be charging $5 fees to checking accounts to pay for debit card activity, he said.

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” Darnell said. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.

The duel announcements came the day after two other major players in the banking arena backed away from the hated debit card fee — SunTrust and Regions.

Those decisions, in turn, followed similar moves last week by Wells Fargo, Chase and other banks to end new debit fees.

"We have heard from our customers and are responding to their feedback by eliminating the monthly fee for CheckCards," said John Owen, head of consumer services for Regions Bank, which plans to refund CheckCard fees already incurred.

Brad Dinsmore, who heads consumer banking and private wealth management at SunTrust, said the bank "recognized the importance of responding to client preferences."

Although many of Chattanooga's other banks and credit unions never imposed a fee on debit card usage, the biggest banks began adding the fee this fall to recoup revenue lost when regulatory changes capped how much banks could charge merchants to process transactions.

Contact staff writer Ellis Smith at esmith@timesfreepress.com or 423-757-6315.

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about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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Comments do not represent the opinions of the Chattanooga Times Free Press, nor does it review every comment. Profanities, slurs and libelous remarks are prohibited. For more information you can view our Terms & Conditions and/or Ethics policy.
Astropig said...

Thank you Chattanooga (and everybody else!). It was your taking your business elsewhere that won this battle. These people got the message when you rose up and reminded them who's really the boss in business-the customer.

I believe that the lesson here is that when these entitled jerks try to stick it to you, your first stop should be the competition. Preferably credit unions and local, customer friendly banks.

I moved my account from Regions before they could hit me with their fee. They don't miss me and I sure don't miss them.

November 1, 2011 at 8:04 a.m.
signal said...

Sorry Regions, too late... I moved my checking account to another bank that actually cares about its customers a couple of months ago!

November 1, 2011 at 8:17 a.m.
onevoice said...

@signal I did the same and closed my account with SunTrust. I agree with you Astropig, if we stand united with onevoice we can take back our government and right the wrong.

November 1, 2011 at 8:46 a.m.
holdout said...

Don't see the connection voice. The banks are not the government. They are private business. You can take your business elsewhere and that affects them. It would have no effect on government to threaten to take your business elsewhere.

November 1, 2011 at 8:57 a.m.
dl said...

Left Regions also - too late for them now.

November 1, 2011 at 10:14 a.m.
Pizzaguy said...

I left Regions last week...and am very happy at the Credit Union.

November 1, 2011 at 11:38 a.m.
dammitchris said...

I opened my Regions account only a few years ago and it was free at first. Within the time my account was open the fees went to 3,5,then 8.00 per month. The check card fee was the final straw. I changed from Regions to a local credit union after they announced the fee. I am sure the big banks will figure out another way to "enhance their revenue streams" at the expense of their depositors.

November 1, 2011 at 12:22 p.m.
Joyanna said...

This issue is part of what last week's Occupy action outside Bank of America was about--the people standing up to the plutocracy. To those of you who made disparaging remarks about our action: YOU'RE WELCOME.

Signed, Just Another Dirty Hippy Working for Justice

November 1, 2011 at 12:34 p.m.
mymy said...

If government stayed out of the way, the free market would choose the winners and losers NOT GOVERNMENT BAILOUTS/LOANS/OVER OR WRONG REGULATIONS, ETC.! A business sinks or swims on their own capabilities and private investment. If they know a bailout will NOT come, I suggest they would do business differently or pay the consequences.

November 1, 2011 at 1:40 p.m.
cer1126 said...

I closed my account with Suntrust at the end of September when I first received the notice about the charges. I'm very pleased with the credit union. There is nothing Suntrust could do now to get my business back.

November 1, 2011 at 4:36 p.m.
carebearsmom said...

Now to get SunTrust to restore the free checking accounts. Charging fees for what had been a free account for over 30 years isn't right. Not in my book.

November 1, 2011 at 5:42 p.m.
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