Editor’s note: Tuesday afternoon Bank of America issued a press release saying that after “listening to our customers very closely” it no longer intends to implement a debit usage fee.
I have been a Bank of America customer since 1996.
The bank has been a constant during my 15 years of moving through four states, two continents, and countless financial products. I’ve had a Bank of America checking account, a savings account, a mortgage, a home equity line of credit, and an ongoing relationship with the Charlotte-based company.
But at the end of this year, I’ll be moving my money elsewhere.
This has been a long time in coming. Our nation’s largest bank has drawn my ire with its anti-consumer actions, including downright scandalous foreclosure practices and fighting tooth and nail against sensible regulations. The final straw is what an expert calls “one of the largest illegal transfers of wealth from consumers to banks in American history.”
When you read “from consumers to banks,” think “from my wallet directly to companies that are already extremely profitable.” Led by Bank of America, a small cohort of banks now plan to charge fees to use their debit cards – fees that would extract billions more from the average consumer.
This isn’t the first time Bank of America has moved against the interests of consumers.
The company’s lending arm is a leader in home foreclosures, and is subject to fraud lawsuits based on many of these. Lobbyists for the bank have successfully fought almost all attempts at reasonable regulation. Bank of America’s political power has also prevented the company from paying any taxes in the past two years, despite significant profits. The profits also haven’t stopped them from planning massive layoffs.
While Main Street continues to suffer in the ongoing economic crisis, the finance sector remains one of the lonely exceptions. Bank of America’s much-ballyhooed drop in revenue still left the corporation with $2 billion in profit over the first quarter of this year.
The debit card issue hits home with bank customers personally. It’s much easier to connect the dots between record bank profits and extraction of wealth from customers.
Some might argue that there is little unusual or distinctive about Bank of America’s practices. While it’s true that other banks engage in similar conduct, it’s also undeniable that America’s biggest bank holds particular influence.
Besides, it’s Bank of America that is leading the charge to raise debit fees. Other companies are looking to the Charlotte company for a signal.
Consumers are fed up. Increasingly, those consumers are sending signals of their own to Bank of America. People wondering why the “Occupy” movement has taken root don’t need to look much further than banking industry practices to figure out why.
Frustration has to take some form. Folks that aren’t the protest type can take another approach that, arguably, has a better chance of influencing a bottom-line-inclined company.
So, what can you do about this?
1. Commit to Moving Your Money. As consumer attorney Lloyd Constantine writes, “customers of Bank of America and of any other bank that follows its lead should swiftly move their business. I am certain that other banks will welcome the competitive opportunity that Bank of America has given them with its arrogant and disingenuous action and justification.”
2. Find a Credit Union (or Alternative Bank). Not all banks are bad, but instead of keeping your cash with a for-profit entity, why not try a member-owned non-profit community credit union?
3. Let Bank of America Know. Like any large financial corporation, Bank of America exists to make money. The best way to convince leadership to change its ways it to send the message that consumers are paying attention.
You won’t be alone. At least one customer of 15 years will be right there with you.
Jeff Shaw is Director of Communications at the North Carolina Justice Center.