Last week, Bank of America announced it would begin charging $5 monthly fees to any customer who wanted to use a debit card at retail establishments, setting off a wave of angry online protests by customers and people already infuriated by government bailouts and escalating bank charges. Since then, the BofA website has experienced significant problems that some experts are starting to believe might be the work of hackers, though BofA flatly denies it.
For its part, the banking giant claims the charges are the result of recently enacted legislation that caps so-called "swipe" fees that banks can charge retailers at about half of what they were previously. The collective "you have got to be fucking kidding me" response online was as predictable as it was understandable considering the Occupy Wall Street protests and the general frustration over the state of financial affairs in the U.S.
And, I'm not here to tell you that you shouldn't be angry. You should. I'm not going to tell you that bank fees don't suck. They do.
I'm here to tell you that Bank of America's biggest mistake wasn't instituting the fee, it was the timing of the announcement.
In 1991, bills would show up in the mail, sit on my desk and, when it was time (or past time) to pay them, I'd sit down for 45 minutes or so, write checks, address envelopes, lick stamps and make sure the mailman picked them up in time to make it before the due date. My interest checking account cost me $15 per month. Stamps were $0.30 each and I probably paid $20 per year for checks.
Figure, conservatively, I spent $225 per year on banking and paying bills -- not counting the actually money paid for the bills themselves, obviously.
Fast forward 20 years. I have paperless billing on all my bills now with statements and reminders sent to my e-mail. I have automatic payments controlled through website interfaces and a bank that will write checks and mail them for me if necessary. I have access to a complex online banking system for transfers and downloading statements balanced by software on my computer.
I pay $12 per month for my interest checking account and never spend a dime on stamps. I write a total of one check each month for rent meaning I won't need to re-order checks for approximately 50 years. Now, I'll probably have to add a few bucks a month for a debit card fee.
That's a grand total of around $205 annually for bank fees. I pay less now than I did 20 years ago and prior to the 1991 Truth in Savings Act, banks weren't even required to disclose fees to their customers. This may not rise to the level of Louis C.K.'s "Everything's amazing and nobody's happy" rant but it's not far off.
Research has shown that text messages cost cell phone providers virtually nothing to send, yet they charge up to $15 per month for unlimited messaging. Had providers not charged for messages that were, by all estimations, an afterthought for them when the service first became available, and then suddenly, years later, announced texting would cost $10 per month, people would be outraged. The first company to do that would probably have an angry mob outside its headquarters and hackers trying to shut down its website.
Bank of America found out that when it charges a fee is just as important (if not moreso) than how much it charges. Banks could have been charging for debit card usage from the start, but they didn't and now they are feeling the heat from consumers.
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It should be noted that banks are not going to be denied the right to charge "swipe" fees. They are just having that amount capped. This is really just a way to prop up profits with revenue streams that didn't exist 20 years ago. It also doesn't help that the change in policy comes in the wake of massive bailouts in which banks deemed "too big to fail" were given billions to rescue them from their own stupid decisions and lack of foresight. Then there's the mortgage crisis that forced thousands from their homes, many of whom were duped into believing they would be fine by those same corporate monoliths that were greedily gobbling up their cash. Add to that the biggest recession most of us have seen in our lifetimes (I barely remember the double-digit inflation and block-long lines at gas pumps of the `70s) and you have a PR nightmare and rightfully so.
In reality, the five-dollar-a-month fee is just a blip on the banking radar and less than what many people spend in a week on Starbucks, but that weeks worth of venti caramel macchiatos was the straw that broke the cash-strapped camel's back. Timing is everything, especially when it comes to people's money.