"Consumers voted with their money and Wall Street institutions finally got it -- but only after waking their customers up to the fact that they are being treated like numbers, not people," National Association of Federal Credit Unions President Fred Becker said in a statement, emailed to the International Business Times.
"Recalling debit fees now are like trying to get toothpaste back in the tube. It simply does not work."
Some customers aren't moved by Bank of America's decision. Fred Brack, a 50-year-old who works for the Metropolitan Transportation Authority in New York, told IBTimes that he plans to move all of his assets over to a credit union that he and his wife already belong to. He opened up an account with his local credit union after he said he was charged checking account fees despite directly depositing his paychecks.
"It is appalling they even tried to institute [the debit card fee], especially after their losses were socialized," Brack said, referring to the money the Bank received under the federal government's Troubled Asset Relief Program.
Anger over Bank of America's new fee, along with other fees from large banks, was widespread. The IBTimes reported Monday that many people were switching their assets over to credit unions. A Facebook event for Saturday, "Bank Transfer Day," called on people to switch out of big banks and provided information for people looking to join a credit union.
On Tuesday, Bank of America blinked.
"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," David Darnell, co-chief operating officer said in a statement given to the IBTimes shortly before the news was made public.
"Our customers' voices are most important to us. As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so."
Bank of America was hoping that other banks would follow suit on the new fees. However, Regions Bank and SunTrust Bank both announced Monday it was dropping the $5 fee they had begun charging customers. JP Morgan Chase and Wells Fargo began testing $3 debit card fees in certain select areas, but announced last week that they would drop plans to continue implementation.
Bank of America blamed the new fee on new government regulations limiting what the bank could collect from merchants for each transaction. The banking industry stands to lose between $6 billion and $7 billion in revenue due to the new law. Many consumer banking experts note that while some may call the decision a "win" for consumers, banks will look to make up lost revenue through other means.
However, Mallory Duncan, senior vice president and general counsel of the National Retail Federation said in a statement that as long as the fees are public, banks will have to listen more carefully to their customers.
"This decision proves that a free and open marketplace based on transparency and competition works," she said. "...This is why card companies and banks have tried so hard to hide their fees - because when excessive fees are exposed to the light of day, they go away."
Write to Samuel Weigley at s.weigley@IBTimes.com.