Students with Bank of America accounts can finally breathe a little easier. Following a surge of protests and public backlash, this Tuesday Bank of America repealed its decision to start charging customers $5 per month beginning next year.
From online protests to street campaigns, outraged customers found a number of ways to express their disapproval. Shaniquia Anderson, U. Illinois junior, said she finds it “ridiculous” to be charged to use her own card. She had planned on changing banks in January as a result of the proposed fee.
Bank of America representatives initially announced the company’s new debit fee in September, stating that the nature of debit card offerings have changed due to recent federal regulations.
This legislation, known as the Durbin Amendment because of the sponsorship of Illinois Senator Dick Durbin, took effect on Oct. 1. As part of the Dodd-Frank Wall Street and Reform and Consumer Protection Act of 2010, this law limits the amount banks can charge customers in overdraft, transaction and “swipe” fees.
According to Daniel Dias, assistant professor of Economics at UI, the new debit fee helps banks make up for potential revenue loss and also pushes customers to use their credit cards instead of debit.
“I am not a specialist on banking … but my understanding with respect to these new fees is that … banks want people to use credit cards instead of debit cards because there are no limits – or at least these are less regulated – on the amounts that the credit card companies and banks can charge retailers,” Dias said.
The act prompted several major companies including Wells Fargo, JP Morgan Chase and Sun Trust Bank to announce plans to test market 3 to 4-dollar monthly debit fees. Even with a number of banks implementing similar plans, Bank of America received the bulk of attention.
Customers and “Occupy” demonstrators took to the streets in front of Bank of America locations across the country to rally against bank fees as well as a number of other bank policies.
Popular campaigns included the “Trick or Transfer” movement on Oct. 31, which encouraged customers to close their accounts with major banking companies. Additionally, an online petition created by Bank of America customer, Molly Katchpole, received more the 300,000 signatures from like-minded citizens. Her website, www.change.org, lists objections to bank fees particularly given that, “the American people bailed out Bank of America during a financial crisis the banks helped create.”
This upheaval throughout the month led the bank to drop their plans, though bank officials from the company attributed the change to “listening” to customer concerns.
According to Monica Bielski Boris, assistant professor in Labor and Employment Relations at UI, Bank of America’s decision to drop the proposed fees were most likely due to financial concerns as well as desires to save their image. While Boris and a number of protestors said this “victory” may be a small one, it shows the public is capable of change in these kinds of matters.
“(The banks) are doing what they can get away with, which is a lot. Banks have a lot of power,” said Stuart Levy, volunteer with the Occupy Champaign-Urbana initiative. “Though bank fees are really a side issue to the whole problem, I think these protests have put the banks on notice and show that they are politically vulnerable.”