Chase, Wells Fargo forgo debit card fees

Chase and Wells Fargo are joining the list of banks that won't be charging customers to use their debit cards, as the backlash over Bank of America's planned $5 monthly fee continues.

The retail banking arm of JPMorgan Chase & Co. will stop charging $3-per-month fees for using debit cards when its current pilot in Wisconsin and Georgia is completed in November, a source with knowledge of the plans told The Associated Press.

Chase began its test in February. And it's not alone in rethinking its actions. Wells Fargo & Co. began a similar pilot in five states on Oct. 14, testing a flat $3 fee for using debit for purchases. On Friday it also announced that it is canceling its test program.

Other banks already have more widespread fee policies. But it was Bank of America Corp.'s plan to start charging $5 per month that lit the issue on fire. The Charlotte, N.C.-based bank last month said it will begin assessing the fee in 2012.

Banks have said they need to recoup revenue lost to new regulations that limit the fees they can collect from retailers for handling debit card transactions. But the new fees sparked anger among customers and politicians, and some customers have switched to banks not charging the fee.

The author of the regulations, Sen. Richard Durbin (D.-Ill.), called the fee an "outrage" on the floor of the Senate.

"It is hard to believe that a bank would impose such a fee on loyal customers who simply are trying to access their own money on deposit," he said. "Especially when Bank of America for years has been encouraging their customers to use debit cards as much as possible."

As a result, credit unions and community banks nationwide are reporting huge spikes in new accounts as consumers seek no-fee options.