Banks Realize People Don’t Like Being Charged to Use Their Own Money
I’ve said before that no issue has resonated more over the last month or so than Bank of America’s plan for a monthly $5 debit card purchase fee. It helped drive the Occupy Wall Street protests, kickstarted a new incarnation of the Move Your Money movement, bolstered community banks and offered a powerful real-world example of greedy Wall Street fat cats.
The rest of the banking industry has taken notice.
A month after Bank of America got pummeled by consumers and politicians for introducing plans for new debit-card fees, most other big U.S. banks are steering clear of imposing similar charges.
Following eight months of consumer testing, J.P. Morgan Chase & Co. has decided that it won’t charge customers who use their debit cards to make purchases, according to a person familiar with the bank’s plans. The New York bank’s Chase retail unit is one of the largest U.S. consumer banks, with 26.5 million checking accounts and 5,300 branches.
J.P. Morgan joins U.S. Bancorp, Citigroup Inc., PNC Financial Services Group Inc., KeyCorp and other large banks that have said in recent days that they won’t impose monthly fees on debit cards. None of those banks said they made their decisions because of the outcry over Bank of America’s fees.
It’s amazing that banks had to even think twice about this. The idea that customers would passively accept paying five bucks to use their own money makes no sense whatsoever. More than being about money, it’s about the total lack of respect that big banks who feel entitled to rip off their customers have.
I’ll bet Bank of America is just thrilled about this. They surely expected all the other big banks to go along with them, minimizing their damage. Instead, only Wells Fargo has instituted a fee, and only as a test case in five states (and they’ll probably quietly phase it out after a couple months). So BofA is all alone, looking the greediest. Can’t say I feel sorry for them.
Kevin Drum points out that banks will probably turn to some other scheme to raise money off of fees from their customers. Now we have a Consumer Financial Protection Bureau willing to point it out and make the fees transparent, however. And the BofA experience has shown that merely publicizing the fees is powerful enough to get the industry to stand down.