Bank Of New York Mellon Backs Off From Its Plans For Deposit Fee

The bank has not assessed a penny since warning clients about the possible deposit fee in early August, officials told Reuters, although it remains burdened by cash that it cannot profitably redeploy at rock-bottom interest rates.

The fee of 0.13 percent was to have taken effect on August 8 for accounts with more than $50 million that had soared well above their monthly averages as clients fled short-term investments for the safety of U.S. banks.

"My guess is that the backlash was pretty stringent and they decided not to do it," said William Gerber, chief financial officer of TD Ameritrade Holding Corp, a cash-management client of Bank of New York. "I can see their problem but I'm not that empathetic considering all the fees we've been waiving."

He was referring to hundreds of millions of dollars of money-market mutual fund fees that financial companies have waived over the past two years lest investors realize negative returns on their fund holdings.

Unlike Bank of America, which was shamed into withdrawing a plan to charge its customers $5 for debit card transactions after a torrent of articles ridiculing the proposal, Bank of New York said that its super-sized version of its deposit fee is not dead.