Arizona Federal Credit Union must reverse course to cancel the $3 monthly membership fee and refund those fees already charged to current and past members.

NEW YORK – SunTrust Bank said on Monday it will stop charging a $5-per-month fee for using debit cards and return the fees it’s collected since June to its customers.

SunTrust cancelled their $5 monthly fee and refunded all previously charged fees. Why can’t Arizona Federal do the right thing and do the same?

SunTrust latest to reverse $5 monthly debit card fee
By Eileen Aj Connelly, Associated Press
Updated 10/31/2011 5:16 PM

NEW YORK – SunTrust Bank said on Monday it will stop charging a $5-per-month fee for using debit cards and return the fees it’s collected since June to its customers.

The Atlanta-based bank followed larger rivals like Chase and Wells Fargo in backing off the fees.

The retail banking division of JPMorgan Chase let news leak Friday that it will not expand the $3 monthly fees it is charging in tests in Wisconsin and Georgia when they end in November. Wells Fargo followed with an official end to its testing of a $3 fee in five states, which had started Oct. 14.

Regional bank SunTrust (STI) says it “listened to our clients’ feedback” in making the decision to stop charging the fees.

Bank of America also said it plans to offer ways to avoid the fees through use of services like direct deposit and or maintaining certain balances, but the bank has not officially laid out its policy.

It was news last month that the Charlotte-based Bank of America planned to charge $5 per month for using debit cards for purchases that generated the most reaction among consumers. Even President Obama joined in the criticism.

The widespread anger helped spark a movement that is encouraging bank customers to move their money to credit unions and community banks that don’t charge such fees. “Bank Transfer Day” is slated to take place on Saturday, but neighborhood-based institutions around the country have already reported sharp increases in account openings ahead of the movement’s designated date for switching. Several larger banks, including Citibank, US Bancorp, PNC Financial and TD Bank, have jumped on the issue to highlight that they do not charge debit fees, although they may charge monthly maintenance fees for checking accounts.

Banks pushed the adoption of debit cards in the past decade in part because it is less expensive to handle transactions made with plastic than with cash or paper checks. Debit quickly became popular, and surpassed credit cards as the most popular form of non-cash payment several years ago. Usage has continued to increase as the economy has continued to struggle.

But a new federal regulation that kicked in Oct. 1 cut in half the fees banks could charge to retailers for processing purchases made with debit cards. That came on top of other recent restrictions for charging overdraft fees — which soared with automatic overdraft coverage for debit cards — and tighter rules on credit cards. Banks said they were instituting the debit card fees as a way to make up revenue lost to these new rules.

SunTrust’s announcement leaves only Regions Financial among large banks charging such fees. Regions began charging $4 per month in October.

About Arizona Federal Credit Union Members United

Arizona Federal Credit Union Members United is a group of over 100 members and former members who care about our credit union being run fairly. The leadership of the credit union has failed to represent us properly by enacting a new and unnecessary, unavoidable, unconscionable, $3 monthly membership fee that we did not want. The members did not ask for this. Before implementing such a counter-productive fee, the proposal should have been put up for a vote to all the members to decide, so the will of the people is followed. The member-owners of Arizona FCU should not be taxed $3 monthly, simply for being a member. We want all the $3 monthly member fees refunded to all current and past members, the elimination of the fee going forward, and the elimination of the $25 rejoining fee. We are against any financial institution charging an unavoidable ongoing membership fee, simply for being a member. This is the wrong approach. Members and customers should be valued, not punished. We want to see Arizona FCU succeed, not fail. Imposing unfair policies that are detrimental to the long-run success of the credit union and detrimental to society should be abolished.
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