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<H1>Durbin to customers: Dump Bank of America</H1><SPAN class=byline>By <A
href="mailto:steve.hargreaves@turner.com">Steve Hargreaves</A></SPAN> <SPAN
class=twitterName>@<A
title="http://twitter.com/CNNmoney
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href="http://twitter.com/CNNmoney" target=_blank>CNNMoney</A></SPAN> <SPAN
class=cnnDateStamp>October 4, 2011: 2:24 PM ET</SPAN>
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<P>NEW YORK (CNNMoney) -- Sen. Dick Durbin on Tuesday urged customers unhappy
with Bank of America's new $5-a-month debit card fee to take their business
elsewhere -- calling the fee a golden opportunity for other banks "not as
greedy" to drum up new business.</P>
<P>"I believe in something called competition," the Illinois Democrat said on a
conference call with reporters.</P>
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<P>Last year, Durbin helped shepherd a law that limits how much banks can charge
on debit card transactions -- a law that led <A
href="http://money.cnn.com/2011/09/29/pf/bank_of_america_debit_fee/index.htm">Bank
of America to recently switch to the monthly charge.</A></P>
<P>"If Bank of America wants to nail their customers with a monthly fee, I want
their customers to make the conscious decision to go elsewhere where they are
better treated," Durbin added.</P>
<P>Durbin said he's sending a letter to Illinois banks urging them to try to
steal Bank of America's customers.</P>
<H2><A
href="http://money.cnn.com/galleries/2011/pf/1106/gallery.annoying_fees/index.html?iid=EL">9
most annoying bank fees</A></H2>
<P>"This is an opportunity for banks and credit unions to win some customers
over," he said. "That is not only good business sense, but common sense."</P>
<P>Bank of America (<SPAN class=inlink_chart><A class=inlink
href="http://money.cnn.com/quote/quote.html?symb=BAC&source=story_quote_link">BAC</A></SPAN>,
<A
href="http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/2580.html?source=story_f500_link">Fortune
500</A>) did not immediately respond to a request for comment.</P>
<P>The so-called Durbin Amendment, part of a larger Wall Street reform law,
limits banks to charging 21 cents for each debit card transaction. Previously
the banks would charge an average of 44 cents, mostly to retailers.</P>
<P>Durbin, citing numbers from the Federal Reserve, said debit card swipes cost
the banks between just 4 and 12 cents -- far below even the new 21 cent cap.</P>
<P>The 21 cent cap is expected to cost the banking industry $5 billion a year,
and other banks are <A
href="http://money.cnn.com/2011/08/22/pf/wells_fargo_debit_rewards/index.htm">considering
moves similar to Bank of America's</A>.</P>
<P>Last month, Wells Fargo (<SPAN class=inlink_chart><A class=inlink
href="http://money.cnn.com/quote/quote.html?symb=WFC&source=story_quote_link">WFC</A></SPAN>,
<A
href="http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/2578.html?source=story_f500_link">Fortune
500</A>) said it will test a $3 monthly fee in Georgia, New Mexico, Nevada,
Oregon and Washington for customers who use their debit card for purchases. That
test begins Oct. 14.</P>
<P>At the end of last year, JPMorgan Chase (<SPAN class=inlink_chart><A
class=inlink
href="http://money.cnn.com/quote/quote.html?symb=JPM&source=story_quote_link">JPM</A></SPAN>,
<A
href="http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/2608.html?source=story_f500_link">Fortune
500</A>) announced a similar test, in which it charged customers in northern
Wisconsin a $3 fee for using their debit cards. A Chase spokesman said last
month that the tests were still underway.</P>
<P>Durbin said banks were trying to make debit cards "more expensive."</P>
<P>"If they can push people away from debit cards and into credit they make more
money. I think that's really the motive behind this."</P>
<P>But the industry disputes Durbin's argument and says the new cap is below
what it costs banks to process transactions.</P>
<P>The losers are consumers, while the winners are retailers that no longer have
to pony up as much money, Frank Keating, head of the American Bankers
Association, said on Friday. </P>
<P>The cap "provided big-box retailers with $7 billion in windfall profits while
forcing banks to lose money on every debit card transaction," Keating said.</P>
<P>On Tuesday, Keating reiterated that the cap has <A
title="http://finance.fortune.cnn.com/2011/07/15/the-de-banking-of-america/
CTRL + Click to follow link"
href="http://finance.fortune.cnn.com/2011/07/15/the-de-banking-of-america/">altered
the economics of debit cards</A>.</P>
<P>"As a direct result of the Durbin Amendment, consumers have started paying
for financial services they previously enjoyed free of charge," Keating
said.</P></DIV></FONT></DIV>
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<DIV><FONT size=2
face=Verdana>________________________________________</FONT></DIV>
<DIV><FONT size=2 face=Verdana>Wayne A. Fox<BR><A
title="mailto:wayne.a.fox@gmail.com
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href="mailto:wayne.a.fox@gmail.com">wayne.a.fox@gmail.com</A><BR></FONT></DIV></BODY></HTML>