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Bank of America Adds $5 Debit Fee

Check out Bas Rutten's Liver Shot on MMA Surge: New federal debit card rules won't kick in until Saturday. But Bank of America wasted no time in announcing a $5 monthly fee for debit card purchases to make up for the expected drop in revenue. The rules in question limit how much banks can charge to process debit card transactions. Those fees now average 44 cents per sale and are paid by merchants. After Saturday, banks won't be able to charge more than 21 cents. The Federal Reserve has determined that this is a "reasonable and proportional" amount, reflecting how much it actually costs banks to process a debit card transaction. Industrywide, these processing fees brought in $19 billion for banks in 2009, according to the Nilson Report, which tracks card payments. So here comes a $5 fee to use your debit card, effective early next year, whether you make one purchase a month or 100. The Fed says 21 cents is a fair amount for banks to charge for processing debit card sales. BofA isn't saying it's going to lose money by charging this amount. What it's actually saying is that it will make less money from debit cards by having to charge a reasonable rate. And apparently the bank doesn't want to tell shareholders that their wallets won't be bulging quite as much as before. So it's slapping customers with a hefty fee — $60 a year — to keep the cash flowing in. BofA has 57 million consumer and small-business accounts. If a majority of them uses debit cards, we're talking a windfall of about $3 billion a year — or $1 billion more than BofA is currently making from transaction fees. So what do you think? Is the $5 monthly fee fair or not? For that matter, if you're a member of Bank of America, will you leave the bank in protest? Leave a comment below and let us know.,0,2342996.column
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