NEW YORK—Bank of America Corp., the nation’s biggest bank by assets, on Tuesday said that it would scrap its previous plan to charge a $5 monthly fee on customers making debit card purchases.

This week’s about-face was due to a strong backlash from customers and the media, and many smaller banks and credit unions profited from customers leaving Bank of America.

While the Charlotte, N.C.-based bank did not disclose the number of customers lost, a statement from the company did say that the move was due to "customer feedback."

"We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," said David Darnell, co-chief operating officer of Bank of America in a statement. "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 the first major bank to announce the debit card fee, which was necessary due to new legislation as part of the Dodd-Frank Act, which capped the amount of fees the bank could charge retailers to 21 cents.

Due to increasing regulatory restraints, banks have increased fees in a variety of ways. Bank of America, for example, increased monthly checking account fees to $12 earlier this year, on its basic checking account. Other banks, such as Citigroup and Chase, have followed suit, with varying degrees of transparency.

In a quarterly conference call, JPMorgan Chase disclosed that the new regulations could cost the bank $300 million per quarter. Other banks have disclosed similar figures due to increased regulatory restrictions.

Increasing Fees an Unpopular Move

After announcing the debit card fee, Bank of America faced customer anger almost immediately.

An online petition started by a customer generated more than 300,000 signatures from current clients. U.S. Sen. Dick Durbin (D-Ill.) said that the bank was "trying to find new ways to pad their profits by sticking it to its customers," according to a statement released from his website.

While Bank of America was the only large bank to announce the fee, other banks were testing the fee in a smaller scale. After customer complaints, JPMorgan Chase & Co. and Wells Fargo Co. canceled their test trials of increasing fees.

SunTrust Bank, a regional bank in the Southeast, said that it would cease charging a $5 monthly debit card fee by Wednesday. Regions bank announced similar plans this week.