Here’s this week’s life lesson: Bank of America does not equal Bank of Americans.
Last week, Bank of America announced it is eliminating free checking for account holders who maintain low balances. Presumably, people who don’t have much in their checking account don’t have much money. So, instead of helping them improve their financial well-being, Bank of America is essentially implementing a poor tax.
In an article about the fee and consumer response, CNN reports:
All customers with eBanking accounts have been moved to Core Checking, which carries a $12 monthly fee. Customers can avoid that fee if they make a monthly direct deposit of at least $250 or maintain a balance of $1,500. Students and customers in a rewards program are also exempt. ContentMiddleAd
This is a company with thousands of branches and millions of customers. I can see Saturday Night Live doing a skit with Bank of America dressed up like Robin Hood and extras playing normal Americans. Only, stealing from the poor to give to the rich would be the hook here.
It’s easy to chuckle at images like this, but it’s not funny to the millions of people who are struggling to make it to the end of each month. Choose your survey, but it’s clear many millions of Americans can’t pay for emergencies. And $1,500 balance won’t hang around long for account holders who can’t ensure a monthly direct deposit of $250.
Read my lips. No new taxes, George H.W. Bush said when he ran for president in 1988. This new fee structure, in effect, is a tax, especially on the poor. But it’s also a tax that consumers can legally evade.
Don’t want to pay the fee? Leave the bank. My suggestion, of course, is to join a credit union.
A Real Head-Scratcher
This is a situation that makes me scratch my head. Why are we here again? How did the board and management at Bank of America think this was a good idea? It just feels like kicking people when they’re down.
Jim Blaine, retired CEO of State Employees Credit Union of North Carolina, was right when he said: Those that have the least or know the least pay the most for financial services.
Bank of America once more shows this to be true.
What’s The Big Idea?
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Clearly, Bank of America is not Bank of Americans. And this latest move draws an obvious comparison to the last time this happened, seven years ago when Bank of America announced it would charge $5 a month for a debit card.
Although Bank Transfer Day drew mixed reviews, there little doubt it had an impact in both good PR for credit unions and actual growth. In the year following that Nov. 5, 2011, event, credit unions posted a net gain of nearly 2.2 million members, the highest in a decade. What’s more, consumers drained billions in deposits from accounts at big banks.
Might this be an opportunity for credit unions to catch lightning in a bottle again? How will you react? Surely, the movement can do something that will have an impact, right?