Bank of America announced yesterday that it would NOT be going ahead with its previously announced $5 debit card use fee. They say they listened to their customers. Damned rights they did. They listened and they watched a lot of them take their money elsewhere.
The news that BofA wasn’t going ahead with the new fee came after the nation’s largest bank JP Morgan Chase as well as Wells Fargo Banks announced last week that they would abandon plans for these fee add-ons. They saw the writing on the wall and didn’t want to further enrage the public (i.e. their customers).
In an Associated Press article from October 7 it was pointed out that Credit Unions were again reaping the benefits of these new bank fees. The country’s largest credit union, the Navy Federal Credit Union, said new account openings over the weekend following BofA’s new fee announcement were 23 percent higher than normal. The Progressive Change Campaign Committee says roughly 51,000 people have signed up to move their money out of big banks on “National Bank Transfer Day” this Saturday. They also said 21k of those who have signed up will be moving their money from Bank of America.
Of course abandoning this $5 fee doesn’t mean BofA, or Wells or Chase for that matter, won’t be attempting to pick your pocket somewhere else. In fact BofA already raised its fee for its basic checking account from $8.95 to $12 last Spring. They’re hurting. They need the money. Bank of America’s stock price was down to $6.71 at the time of this writing. That’s from a high of $54.77 five years ago this month, and a post-recession high of over $18.00. Their January 2008 purchase of Countrywide Financial Corp looking increasingly like the wrong thing to do. Old Countrywide mortgage loans are STILL exploding on BofA and on our country.
But the obvious good news with this retraction of the proposed fee and for the time being no new replacement fee is that Capitalism works. This is exactly how it is supposed to happen. And guess what no Government intervention was necessary. 18th Century writer, philosopher and economist Adam Smith had it right in his seminal book The Wealth of Nations when he described the invisible hand that guides a country’s economy. Government needs to stay out and things will work out. It’s in each individual company’s and corporation’s best interest to serve the public, their clients, for to do otherwise will only hurt their bottom line. And growing the bottom line is most important of all.
Anyone with eyes wide open will see that Government interference in the form of the Dodd-Frank Banking Finance law forced banks to impose many of these new fees by restricting how much banks could charge merchants for the use of debit and credit cards (I bet a lot of you didn’t know that we, the business owners, also pay the banks every time plastic is used). Banks, as well as other companies will seek revenues and if government takes away one form of income, they’ll just go elsewhere. And the ones who will pay the real price is the consumer. Thank you again Democrats. Every time you try to protect us we get the shaft.
Nonetheless, take homage in the fact that your outrage moved big bad BofA, Chase, Wells Fargo and others from imposing THIS fee. You the consumer do have choices. You can go to a neighborhood bank or Credit Union you can spend your money elsewhere, or choose not to spend at all. Think of the Occupy Wall Street protesters and their claims of big corporations having way too much control. Let this be their lesson that the big corporations only have as much control as we give them. And the one, and possibly the only thing I’ll agree with OWS about, is that its long past time that we stop giving the big corporations so much power. But we don’t need government to do anything. We need to take responsibility for ourselves, our habits, and our spending.
But, of course, this comes from a guy who’s had his money in a credit union for some 15 years.
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