Bank of America got pummeled by investors and its customers Friday, a day after announcing that it would charge many debit card users a $5 monthly fee when they shop.
The troubled bank, already besieged by multibillion-dollar lawsuits and massive financial losses, saw its stock fall more than 2 percent in late-morning trading. The shares have plunged almost 44 percent for the quarter, the worst-performing in the Dow Jones industrial average by far. For the year, the stock is down 56 percent.
Now the bank faces a public relations backlash.
The debit card change has sparked fury on the Web and cable news channels. Consumers complained on message boards and in social media, vowing to take their business elsewhere.
Fox Business Network’s Gerri Willis went as far as to cut up her debit card on the air Thursday evening. “Right here, right now, I’m going to show Bank of America what I think of their fees,” she said before using a pair of scissors.
“That $5 fee may not seem like a lot, but it’s the principle of the thing — more and more coming out of my pocket,” she said.
Bank of America has said it decided to impose the fee after legislation sponsored by Sen. Richard Durbin (D-Ill) reduced the amount of money banks get when consumers swipe their debit cards in stores.
“Bank of America is trying to find new ways to pad their profits by sticking it to its customers,” Durbin said in a statement Thursday. “It’s overt, unfair, and I hope their customers have the final say.”
Bank of America, the largest bank in the country by deposits, is facing lawsuits stemming from shoddy mortgage practices during the housing boom. Last month, it announced it would shed 30,000 jobs and reshuffle its corporate leadership.
To shore up confidence in the company, the bank has repeatedly insisted that it does not need to raise capital and has sold off several valuable properties. It also took a $5 billion investment from Warren Buffett in August.
The bank will begin charging the fee next year for the bank’s basic checking accounts. It will apply only to debit card purchases and not to ATM withdrawals, online bill payments or mobile phone transfers, the company said.