SunTrust, Regions latest banks to retreat on debit fees

@CNNMoney October 31, 2011: 6:25 PM ET

NEW YORK (CNNMoney) -- The big banks' race to backpedal on controversial debit card fees has picked up speed.

SunTrust (STI, Fortune 500), a large regional bank based in Atlanta, announced Monday that it will no longer charge $5 a month for debit card purchases starting Wednesday. Shortly afterward, Alabama-headquartered Regions Bank (RF, Fortune 500) said it will nix its $4 monthly fee on Tuesday.

Additionally, both banks said they will refund any customers previously charged the fee. SunTrust began charging the fees in June, Regions in October.

"We've listened to our clients' feedback and will provide the convenience and security of check cards at no additional charge as part of all of our checking accounts," said Brad Dinsmore, a consumer banking executive at SunTrust.

Regions likewise said that customer backlash drove its about-face. "We have heard from our customers and are responding to their feedback by eliminating the monthly fee for CheckCards," said John Owen, head of consumer services for Regions.

SunTrust and Regions' turnabouts leave Bank of America as the only major bank with plans to charge customers for debit card purchases -- though it, too, has scaled back its plans in the face of consumer wrath.

As of Friday, Bank of America was weighing proposals that would allow some customers to escape the charges. BofA's fee is not due to take effect until January.

Following SunTrust and Regions' reversals, Bank of America did not immediately respond to a request for comment about whether it would move forward with the fee in light of major competitors' plans to abandon such charges.

The stampede to reverse fees began Friday, when the country's largest bank, JPMorganChase (JPM, Fortune 500), decided not to impose them.

Wells Fargo (WFC, Fortune 500) later called off a pilot program it had planned in five states that would have charged a $3 fee for debit card usage.

And Bank of America (BAC, Fortune 500), which has faced a wave of consumer wrath over its planned rollout of $5 a month debit card fees, is considering proposals that would allow customers to avoid them, according to a person familiar with the bank's plans.

Despite the banks' retrenchment on the fees, it may not be time for their customers to break out the champagne.

"Banks will just try to find some other fee to charge to make up for it," said Brian Foran, an analyst with Nomura.  To top of page

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