Are the largest banks spooked by the public backlash against Bank of America's debit card fee foray, the fallout of which has engulfed them all?

To be sure, we've seen banks beat a fast retreat from their debit card fee plans. Several banks, including JPMorgan Chase and Wells Fargo, canceled pilot programs aimed at exploring fees, going so far as to offer refunds. The likes of Regions and SunTrust also decided to reverse previous decision to impose such fees.

At the same time, most people assume that banks will continue to find ways to raise other fees, which is understandable in the wake of the Durbin Amendment. But now comes word that JPMorgan Chase will nix two more checking account fee pilot programs. TheStreet.com reports the bank will end a test program in Oklahoma that charged a $10 monthly checking account fee that couldn't be waived through direct deposits or online banking requirements and a test program in Atlanta that charged $15 monthly checking account fee. The fee could be waived only if a customer held a minimum daily balance of at least $1,500 or a combined $5,000 in deposit and investment accounts.

It wouldn't be wise to read too much into this. But it does offer an opportunity to note that banks are definitely rethinking their fee strategies. Additional fees are still likely, even necessary. But banks have to give serious thought to the degree to which these fees will be accepted by their customers, which remain ornery.  

We raise this in light of a recent report from consultancy Cg42, which has projected that the top 10 U.S. retail banks will "lose a combined $185B in retail deposits over the next 12 months if existing customer frustrations are not addressed. Of the 10 banks, the Big Four (Bank of America, Chase, Citibank, Wells Fargo) have the most at risk and account for $135B, or roughly 73 percent of the total projected deposit losses over the next 12 months."

The report also notes: "Proportionally, Chase, Citibank, Bank of America and TD Bank have the most customers currently considering a switch. Whereas the category average stands at 20%, each of these financial institutions has more than 22% of customers considering a switch, or ‘in play.' From the sheer size of deposits, Wells Fargo, Bank of America, and Chase have the most to lose--with Wells having $94B, Bank of America $88B, and Chase $83B of its deposits currently ‘in play.' "

On the other hand, some banks are poised to fare better. PNC and SunTrust are the least vulnerable and stand to lose the fewest customers (as a percentage of their current customer base). "Their projected customer loss stands at 7.4% and 7.5%, and their projected deposit loss at $9B and $6B, respectively."

To be sure, the big banks may not care so much if the smallest accounts defect. But they certainly want to hang onto larger accounts that have the potential to pay more in fees. This is a tricky moment for the top banks. Again, I maintain that customers do not mind paying fees as along as it associated with a legitimate service.  -Jim