Putting the Bank of America Announcement into Context
The new fees were part of a series of events that led the average consumer to see the debit card fee increase as an affront; a slap in the face, and perhaps the straw that broke the camels' back. First, in late 2008, BofA teeters on the edge but is bailed out by the taxpayers in the form of largess from the Fed. Then, it's effectively bailed out again by Warren Buffett, who invested $5 billion in the bank in August. Then, after getting past the technical difficulties of the process, it begins aggressively foreclosing on homes all over the country. Then — the icing on the cake — in the first week of October, the bank discloses it voluntarily paid a total of $11 million as part of a separation agreement to Sallie Krawcheck and Joe Price, two executives thrown out by dint of a management restructuring, even as the company says it will begin firing as many as 30,000 employees over the next several years.
For those who doubt that there was genuine fury and furor among consumers that came to a head with the announcement of the new five dollar fee, I give you Ms. Molly Katchpole, the BofA customer who launched an online petition within a few days of the bank's late September announcement, that asked the bank to reverse its decision.
"Tell Bank of America: No $5 Debit Card Fees" was signed by over 150,000 angry people within a week of its first posting. I'm not sure I can remember any petition that garnered so many signatures in such a short period of time. I would say that's a pretty viral exclamation point!
Brian Moynihan, CEO of Bank of America, has defended the fee decision.
[Related Article: As Occupy Wall Street Grows, Scope of Grievances is Great]
It's Time for an Attitude Adjustment
It's not just the lousy five bucks. It's the "Thank you, Screw You" attitude that's really lighting up the nation. Americans who are graduating from college without job prospects and with huge loans to pay, as well as those who are losing their jobs and their homes in unprecedented numbers, are feeling that the banks that did them in were bailed out on the backs of the 99 percent. They all also know that the fat cats who were in charge of this mess keep getting fatter. They are still making big salaries and big bonuses. Even as bank profits (billions though they may be) have slipped, the amount of money they pay out to employees – the bonus pool – has not dropped at a commensurate rate. And some banks, notably the one that has just instituted a certain $5 debit card fee, are actually spending more on their employees. Paul R. La Monica, of CNNMoney, writes, "BofA posted a 22% year-over-year drop in revenue for the first three quarters of 2011. Despite that, the bank said that 'personnel' expenses were up 7 percent. And this is from a bank that recently announced plans to cut 30,000 jobs!"
I may be a one percenter but I'm not a mega-banker. If my business fails, I will lose a great deal of money. Indeed, I may even get wiped out. But I don't wreck the economy, there's no taxpayer largesse to bail me out and I definitely don't get a fat bonus.
But let's not get sidetracked. This column is ultimately not about whether or not the Occupy Wall Street movement is correct or justified. It's not even about the actions taken by Bank of America or any of the other big banks that I believe have contributed mightily to a very real and developing protest movement. I'm not here to pass judgment.