No matter how large a company or bank is, the power of the consumer to protest with their wallets can always make a world of difference. On November 1st, that power reaped success as a spokesperson for Bank of America has reported that the banking giant is recalling its planned debit card fee increase that it announced in October.
As expected, following the complete failure of banks to institute an extortion cartel on debit account fees after two already defected, it was only a matter of time before Bank of America withdrew as well. Sure enough:
BofA Drops Plan for $5 Debit Fee, Spokesman Says
Now, while this is great news for whatever deposits BAC has left (substantially lower than what it had at September 30, that’s for sure), it doesn’t answer the question – just how will the bank make money? – Zerohedge
Backlash by consumers on this new bank fee had been strong enough to even bring Congressional inquiry into Bank of America’s new policy.
The power of consumers to demand changes to company policies is not new, and has been an American tradition for many years. In fact, earlier this year when DC Comics was planning on having Superman renounce his US citizenship to become a global hero, the public spoke out with outrage and even the potential for boycotts against the comic book giant.
In fairness to Bank of America, it was Congress who actually helped create this planned debit card fee through passage of the Dodd-Frank banking bill after the 2008 credit crisis. In the bill, fees charged for credit card usage with businesses were cut, and thus a large portion of bank revenues were suddenly removed from their balance sheets. In response, Bank of America felt it had no alternative but to ‘tax’ their account holders to make up the difference for the lost revenue.
As banks continue to fail across the US, with 11 institutions closing their doors in October alone, customers are finding fewer options to secure their money, and perform financial transactions. Bank of America found out the hard way that in these difficult economic times, implementing draconian fees on their customers is not a very good business practice, and the power of the consumer to protest against this fee bore fruit as the banking giant relented and decided to remove the fee going forward.