Some Bank of America customers have already left the bank due to the newly proposed fees on debit cards. B of A plans to charge customers who use their debit cards to make purchases a $5 monthly fee starting early 2012.
Luc Nguyen has been a customer for 25 years. He said he had already been charged high fees. When he heard about the new fees, he moved his holdings, including retirement accounts, business accounts and personal.
"Altogether we closed eight accounts with Bank of America," said Nguyen.
He brought his business to a local credit union where the service does not match that of B of A. ATM's are not as advanced and the website is not as easy to use.
"The new one, it's not compatible with Google Chrome and with Bank of America it works, but that benefit I can swallow it. It's money out of my pocket," Nguyen said.
Why charge the debit card fee?
In a statement, Bank of America said "The price of a debit card was previously determined by the amount and type of transactions. We were able to pass some of these costs along to merchants, but because of regulatory changes, we are adjusting our pricing to reflect today's economics."
The new regulations were part of the Dodd-Frank Act's Durbin amendment. The rule capped fees that banks can charge merchants for processing debit card transactions.
Professor Martha Doran of San Diego State University's School of Accountancy said Bank of America has faced financial difficulty and is looking to boost its revenues.
"This will be the first year in history that they're making more off of fees than they are off those credit card interest," Doran said.
More fee hikes could be on the way. SDSU School of Business Professor David Ely believes that with income from loans falling, other major banks will look to raise money in the same way. Ely believes they're waiting to see the response from Bank of America's fee hikes.
Bank of America customer Clarence Grier said he called the bank and said he wanted leave the bank. They asked him to wait a week before deciding to close his accounts, but he's not optimistic.
"The government already bailed them about, bailed Bank of America out too," Grier said. " All of the banks. What do they need? They already got what they need."