Bank of America Drops Debit Fee Plan

By Todd Sullivan of Value Plays

You’d think this was meaningful the way every news outlet is reporting it. The wasn’t “New Coke” kids

– In response to customer feedback and the changing competitive marketplace, Bank of America no longer intends to implement a debit usage fee.

“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” said David Darnell, co-chief operating officer. “Our customers’ voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”

Black eye when announced, now back patting for “listening to customers”. Pretty simple really. But, what about the revenue they would generate from it? My guess is they (along with every other bank, $WFC$JPM)) will ratchet up non-network ATM fees for customers and non customers alike. I’m sure we’ll see some other fees. Here is the thing, when we were only talking $5/month for certain customers, it really won’t take much to make that potential revenue up plus some. Heck, even just lagging a few months on bringing down credit card interest rates or leading the pack up will do the trick and then some. That would be the easiest as those folks who carry large balances aren’t likely to be getting another card from another bank at a better rate anyway so they’ll pay…..

Point is $BAC and the other banks will find a way to make the extra $$ they need and also now look like good guys for “listening to customers”

Non story folks….

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About the Author

Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.