National Restaurant Association: Big Banks Should Heed Spirit Of Reform

The National Restaurant Association today responded sharply to news that Bank of America, among other large banks, would begin charging customers a $5 monthly fee for making debit card purchases, on top of any existing monthly fees customers may already be paying.

"Consumers should know that certain banks are announcing this new monthly fee, just as the new savings for debit transactions is supposed to start, and in addition to the monthly fees they already charge their customers, not because they have to, but because they can," said Scott DeFife, Executive Vice President of Policy and Government Affairs for the National Restaurant Association.

According to news reports, Bank of America will begin charging customers a $5 monthly fee for making debit card purchases starting early next year. As described by the Associated Press, "The fee will apply to basic accounts, which are marketed toward those with modest balances, and will be in addition to any existing monthly service fees. For example, one such account charges a $12 monthly fee unless customers meet certain conditions, such as maintaining a minimum average balance of $1,500." Wells Fargo and J.P. Morgan Chase are currently testing a $3 monthly fee in select markets.



"The actions of some of these banks is extremely regrettable. It is also short-sighted, as their customers may soon find better value among community banks and credit unions who will be able to offer better pricing to merchants and their customers due to the new rules," DeFife added.


DeFife noted that economic data uncovered during the interchange debate pegged the average debit transaction processing costs at only four cents per transaction, which the banks can completely recapture due to the allowance made by the new Federal Reserve rules that are just going into effect. Restaurants and the retail merchant community have been working on ways to pass the anticipated savings on to consumers now that the rules are in effect, but the announcement of the new fees on bank customers could negate the savings for certain consumers.

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Founded in 1919, the National Restaurant Association is the leading business association for the restaurant industry, which comprises 960,000 restaurant and foodservice outlets and a workforce of nearly 13 million employees. Together with the National Restaurant Association Educational Foundation, the Association works to lead America's restaurant industry into a new era of prosperity, prominence, and participation, enhancing the quality of life for all we serve. For more information, visit our Web site at www.restaurant.org.


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