Bank of America is feeling the impact of their controversial proposal to impose a $5 monthly debit card fee.
The banking giant said that there was a 20 percent increase in closed accounts in the last three months of 2011.
Asked about the fee debacle in a conference call with investors last week, Bank of America CEO Brian Moynihan said, "So I'd say that yes, we had some impact from the $5 debit fee. That's why we made a decision to reverse it," ABC News reported.
Out of fear that they would also suffer a backlash, Verizon Wireless canceled a $2 fee for single bill-pay transactions online or via telephone in December, just one day after the telecommunications company announced the fee.
"Banks will now be careful to only attempt to impose fees that add value, as opposed to nuisance or 'gotcha' fees. Unfair fees now result in consumers voting with their feet," said Ed Mierzwinski, director of the consumer program with the U.S. Public Interest Research Group.
During an earnings conference call on Thursday, Moynihan revealed the $5 debit card monthly fee, proposed in late September and taken back just one month later after public outcry from customers, led to an "elevated level of account closings in the quarter." That elevated level accounted to a 20 percent jump in closings in the fourth quarter of 2011 compared with 2010.
Bank of America reported earnings of $2 billion in the last three months of 2011, up from a net loss of $1.2 billion in the same period a year ago.