Bank of America sensibly relents on debit-card charge
Bank of America wakes up on a $5 monthly charge for debit card use — and drops it. This was no act of corporate do-gooderism. The bank was pressured into the move, belatedly. But it was the only sensible course of action.
WE may never know exactly how many customers Bank of America lost, but its plan to charge a $5 monthly fee for debit-card use spurred deserved outrage and prompted a number of people to move accounts elsewhere.
After triggering complaints from President Obama, protesters in the streets and once-loyal customers, Bank of America snapped to its senses Tuesday and revoked the nettlesome fee. This was not corporate do-gooderism. The bank's action came late, only after it was pressured into abandoning the fee. Still, the bank belatedly responded to consumer sentiment.
Two major competitors, Wells Fargo and JPMorgan Chase, abandoned similar charges earlier. On Monday, SunTrust, a regional bank, also dropped a planned charge.
The anger that followed the decision to level a fee flowed from many sources. Debit cards are modern-day checks. It's hard to believe banks expect customers to return to more cumbersome check writing, which surely requires more processing time.
New debit fees were part of efforts to find new revenue sources after new rules limited traditional fees banks can charge, such as fees levied on merchants for debit-card purchases and overdraft charges.
So, tone-deaf banks, like Bank of America, came along and said, in so many words, "You pay me one way or you pay me another way."
The announcement of new fees coincided with the early stages of Occupy Wall Street protests. Yet such bottled-up fury, while understandable, cannot be allowed to get out of hand, and this week it was beginning to do that, especially in Oakland. Overriding peacefulness had been a selling point of the Occupy protests.
In fairness, other banks, aside from Bank of America, were also trying to make up losses, though much heat was directed at it. Wells Fargo Bank was testing its fee in several states. JPMorgan Chase also planned a debit-card fee; SunTrust Bank introduced a debit-card fee for some customers.
But when consumers started moving accounts, or threatening to do so, some banks moved more nimbly and quickly. By Monday, they had retracted the fees.
By then, Bank of America had no other choice but to follow suit. Late, for sure, but the only sensible move. Protesters had declared Saturday, Nov. 5, "Bank Transfer Day," the day to move accounts from big banks, especially those charging people for using their own money, to smaller banks and credit unions, presumably with a more customer-friendly way of doing business.