The most popular story in the online Business Day section of the New York Times early this morning is the tale of a populist uprising, 2011-style, through social media. As Tara Siegel Bernard puts it, Bank of America “blinked” yesterday and reversed its decision to charge customers $5 for using their debit cards to access their own money.
“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 an unadorned statement yesterday. “As a result, we are not currently charging the fee and will not be moving forward with any additional plans to do so.”
Change.org was quick to issue a release of its own (replete with the contact information for BofA public relations folk) claiming victory “after more than 300,000 from all 50 states” digitally signed the petition on its website started by one Molly Katchpole.
“With no funding and while working two part-time jobs, a 22-year-old recruited hundreds of thousands of people from across the country to join her in challenging one of America's most powerful financial institutions,” writes Change.org’s founder Ben Rattray. “Not only did she win, but the success of her campaign drove all of the major banks into avoiding the same types of fees.”
“The debit charge dust-up is one of the biggest fee debacles since the 1990s, when then-regional bank First Chicago Corp. attracted national attention for charging customers $3 each time they went to a teller window instead of an automated teller machine,” write Robin Sidel and Dan Fitzpatrick in the Wall Street Journal. And, they report, it not only “kindled a political firestorm when U.S. Sen. Richard Durbin (D-Ill.), called on Oct. 3 for customers to ‘vote with your feet’” but the PR debacle also “made the bank the butt of jokes, with Jay Leno of NBC's ‘Tonight Show’ likening Bank of America on Monday to a greedy trick-or-treater.” And showing a mock commercial with the tagline: “Screwing Over Americans One Customer at a Time.”
Reporting in the Los Angeles Times, E. Scott Reckard writes that the “the uproar against BofA illustrates the deep-seated anger and resentment many Americans feel over the sagging economy. For many, the fee became a rallying cry for consumer anger at the banking industry.”
"It was a reality smack in the head for these companies," SNL Financial analyst Nancy Bush tells Reckard. "And in my view it was much needed."
Bank of America also, we must point out, watched its peers fly the coop once they saw the reaction of the crowd to its canary-in-the-mine experiment. Rivals including JPMorgan Chase and Wells Fargo “decided against similar charges,” writes Bloomberg’s Hugh Son, “leaving the Charlotte, North Carolina-based firm the only U.S. lender among the biggest five with plans to introduce the fee.”
Indeed, although Ad Age’s main hed over the Bloomberg story crows about the “Victory for Consumers,” the subhed reads: “Reversal Comes After Largest Competitors Abandoned Strategy.” Within the story is a statement from Citigroup’s head of U.S. consumer and small-business banking products, Stephen Troutner, who says the bank had asked customers what they thought about a similar fee on debit cards.
"They said that it would be a massive source of irritation for them,” writes Troutner. “They spoke. We listened." (Gotta love the translation of “really piss us off” into “massive source of irritation.”)
That’s not stopping Citigroup from charging its checking customers $10 a month unless they maintain a $1,500 average monthly minimum balance or make one online bill payment and one direct deposit per month, however.
"For many consumers, the Bank of America debit card fee was the last straw," Norma Garcia, manager of Consumers Union's financial services program tellsUSA Today’s Sandra Block. But Everybody Knows, as Robert Paltos, a commenter to the story on the Ad Age site puts it, “this bank and other like institutions will find other ways to extract their pound of fees from ALL of us ... whether buried in small print or other 'rationales.'”
Paltos’ broader point, however, is that “we're witnessing the strength and magnitude of how M/M Public can marshal the relevance of our media systems in play. While we're all picking over ad unit debates, social/message interactions, branding, DM attributions and much more...this bank's decision provides significant testimony to the relevance of our media venues...ALL of them!”
Including, presumably, email newsletters.