BofA Drops Controversial Plan To Charge $5 Debit Card Use Fee

New York, NY (WIBX) - Bank of America is abandoning a controversial plan to charge customers a monthly fee to use its debit cards. Officials with the nation's second-largest bank say they are not moving forward with the proposal to impose a $5 month fee beginning early next year.

The move drew a huge backlash from customers and spurred competition among banks and credit unions who used the controversial proposal as a tool to lure customers away from financial institutions who imposed, or planned to impose the monthly debit card use fee. Bank officials in Charlotte, NC, where the company is based, said the fee was meant to make up revenue lost under a new banking reform law that restricted how much banks could charge merchants for debit transactions.

Other banks such as Wells Fargo and JP Morgan Chase previously dropped their plans to charge debit fees, as well.  According to Bloomberg News, Bank of America's stock is down more than six percent during midday trading. Also, BofA lost its title of the biggest bank in the U.S. after its October 2011 third-quarter assets report. The company is now second to JP Morgan Chase according to a New York Times report.