(Image Source: Financial Services Technology)

BY ADNAN S. KHAN

Apparently five dollars can do a lot these days. Not only can it get you a sub-sandwich but also alienate an entire customer base for a bank.

After some initial experimenting with monthly fees for using a debit card, JPMorgan Chase & Co. and a host of other banks have backed away from the idea. But Los Angeles Times reports –  one bank isn’t budging.

“BofA Chief Executive Brian T. Moynihan said this week that he’s ‘incensed’ by public criticism of his company and is pushing back by reminding local leaders of its contributions to their economies.”
 

But while Bank of America is taking the firmest stance on new fees, The New York Times reports even they might cave under the pressure.

“Although bank officials said their thinking was ‘evolving’ and no firm conclusions had been reached, the bank is likely to broaden the number of customers exempt from the fee. Customers who hold Bank of America credit cards, directly deposit wages into the bank or hold a minimum balance will not be charged under a new plan.”
 

The banking fee showdown started with the passage of a new law restricting the amount banks can charge businesses for debit-card transactions. The law, designed to promote small business growth, has lead to a revolt against plastic.
 

Consumer advocate groups have asked people to close accounts with banks that impose the fees. Other customers have dropped banks altogether. NBC reports:
 

REPOTER: “Consumers can often avoid the fees by switch to credit unions. In Seattle, BECU has seen the accounts jump from the norm of 7,000 per month to 16,000 in October alone.
BECU EMPLOYEE: You're going to get free checking, in some cases you're going to get interest with your checking. You're not going to pay to see a teller. You're not going to pay to have, you know, funds transferred from a savings account.”
 

Other consumers are planning to rely on credit cards exclusively, which a writer for The Baltimore Sun says is exactly what the banks want.
 

“Of course, banks likely won’t be sorry about that if consumers use credit cards instead. The whole idea of adding a fee to debit cards is to make up for lost revenue on debit card transactions ... The fee merchants must pay banks to process credit card transactions stays the same, so banks will earn more from retailers if you use credit rather than debit card.”
 

The banking industry is losing an estimate $6 billion from the reduction in business-transaction charges. The Wall Street Journal says most banks will find other ways to make up the money.
 

SHIRA OVIDE: These fees they’re sorta of like Wack-a-Mole right, if Bank of America or JPMorgan, if they can’t charge debit card fees on consumers they’ll find some other way to make up the money out of your wallet. They’ll lower the rates they are paying on deposits
HOST: Charge you a minimum checking fee…They’re plenty of ways to do it.”