Bank of America announced last month that it will begin charging its customers a $5 monthly fee to use debit cards. The announcement has been met with stern disapproval from customers and the White House alike. However, at least one small bank is stepping up and rewarding its debit card holders by paying them.
Community Bank, a regional institution with 17 branches throughout Southern Florida, announced this week that it will pay its checking account holders $5 per month, according to Bradenton.com. The reward is being offered as a direct counter to the recent move on the part of the banking giant.
Katie Pembles, president of Community Bank, recently told Bardenton.com:
“We needed to do something to help consumers who are under attack from behemoth national banks charging fees that just don’t make sense. People have a choice of where to bank, and at Community Bank, we thought paying people $5 per month rather than charging them $5 per month was a good way to set us apart.”
Income lost to regulatory reform
Bank of America cited a need to make up income lost to regulatory reform as its reason for charging account holders the monthly fee. And Wells Fargo and Chase banks announced similar pilot programs to be tested early next year.
The announcement from B of A led to an immediate backlash from angered consumers. The Navy Federal Credit Union reported a 20 percent increase in new accounts the weekend following B of A’s announcement.
President slams the move
President Barack Obama reacted harshly to B of A’s move to sidestep federal regulations at the expense of its depositors.
“You don’t have some inherent right just to get a certain amount of profit if your customers are being mistreated,” the president said.
‘An interesting strategy’
According to the Huffington Post, Philip Van Doorn of the financial news site TheStreet.com said paying consumers back was “an interesting strategy” that makes “sense” if a bank is liquid and is growing loans.
Perhaps this announcement presages a trend from local banks, hoping to lure disgruntled consumers away from the less-personalized service they receive from giant lenders.