In a sign that a leverage point between powerful financial institutions and the general public may have been reached, Bank of America recently announced that it was backing off from plans to institute a $5 monthly fee for use of its debit cards. Debit cards not only provide consumers with access to ATM machines, but also allow them to shop cash-free without checks or credit cards.
According to the New York Times, Bank of America reversed its earlier decision after hearing from more than 200,000 of its customers.
“We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee,” David Darnell, co-chief operating officer at Bank of America, said in a statement. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
Several other banks that had announced plans to initiate debit card charges after the first of the year – including Wells Fargo and JPMorgan Chase – had already dropped their proposals.
B of A had originally announced the charge around the first of October just as the Occupy Wall Street movement was gaining traction. At the time, we had predicted that the move would be a “tipping point” in the fight toward independence from powerful financial interests, and since that time, the Occupy movements have spread across the country and – to a certain extent – around the world.
In an off-the-record conversation with a B of A employee, I discovered an unsurprising truth about the $5 debit card fee: it would never have been charged to the bank’s biggest and best customers. Business customers would be exempt, this employee alleged, as would high value private customers. The fee was intended for the lower tier of the bank’s customers who could ill afford it.
There is no reason to believe that the banks are in a true retrenchment mode or that they will not find other ways to extract revenues from customers. But the big banks do have something to worry about.
A non-profit Move Your Money Project encourages Americans to shift their funds from large, corporate banks into small, local banks and credit unions, thus ending the “too big to fail” juggernaut. The campaign claims to have encouraged the movement of more than four million accounts over the past two years. Its website predicts the movement of another 12 million accounts over the next two years.
In fact, Bank Transfer Day – in part sponsored by the Move Your Money project – is officially this November 5. Noting that Bank Transfer Day is a Saturday when many banks and credit unions are closed, yes! Magazine wisely states, “you should definitely make your move before the weekend.”
Meanwhile, the role of banks in the current financial crisis has already become the subject of presidential politics as well as best selling books and high grossing movies. As the election rhetoric heats up, calls for tighter regulations and more consumer protections are bound to become stump speech fodder. But given the amount of campaign finance funds funneled into both parties by the financial services industry, it’s hard to imagine major changes coming via legislative action.
Of course, there is always the possibility that a no-nonsense libertarian-Republican like Ron Paul or the Green Party iconoclast Jill Stein could be elected without the support of the big banks, but even they would have to deal with legislatures filled to the brim with establishment Ds and Rs.
Taken together, Move Your Money, Occupy Wall Street, and extreme dissatisfaction with national leadership out of Washington may well equate to a kind of tipping point in American politics. And a little plastic debit card may weigh just enough to have tipped the scales.