As a former executive in banking, a $5 fee increase was a frequent and minus any potential threat of consumer backlash, but times are different for the consumers and the country. The consumers did not riot, protest, or actively pursue mass reallocations of business to smaller banks or credit union when bankers and Wall Street did take the country to the edge of the economic abyss, became recipients of bailout funds for behaving badly, or foreclosure procedures that were unethical to witness people losing their homes even innocent consumers along with the delinquent homeowners. However, the $5 debit card fee debacle has broke loose a storm of consumer discontent with with the business(Wall Street and banks) and political leadership of our country. The LA Times reports that consumers of young and old are protesting the banking industry the focal point of this process is Bank of America Bank of America(B of A).
As the bank was following the lead of the Wells Fargo and JP Morgan Chase, B of A did announce the implementation of a $5 debit card fee per month for consumers with debit cards. B of A did act blindly in implementation of the fee without any consideration of this issue being the tipping point of consumer anger. In addition, the banks were losing an important source of revenue under the Financial Reform implementation, and the banks did react without any thought . The banks were recipients of fee income from Visa/MasterCard when consumers used credit or debit cards as payment with Visa/MasterCard. The financial reform legislation limits the fee income by capping fees by bankcard providers paid to banks for each time a transaction payment is conducted via Visa/MasterCard. This transaction fee was transparent to the consumer, and the numerous problems in the financial system were not a result of the exchange fee arrangement between bankcard companies and the banks. In reality, the policy makers did construct financial reform legislation with an issue that was not a contributing factor to the almost total collapse of the economy. In addition, banks would react in the same knee jerk style in the changes in the law by implementing a fee structure during the height of consumer disgust toward the industry. The consumer anger is over an issue that should not have come to be the cornerstone of financial reform in lieu of its minor impact to the crisis.
In the reality of the current day situation, the policymakers in Congress and President Obama did construct overall bad policy as a remedy for financial reform. The impact has been minimal of financial reform on the bad banks as same behaviors and attitudes persist in profits being pinnacle over the consumers in the communities being served. The country has a personal financial literacy crisis that is growing daily. Real financial reform is providing consumers a financial system with access to education, simple regulatory/ protection, and free market competitive environment with the consumer as the centric benefactor of the reform policy. The consumers has been recipient of the bitter reality of financial reform. The reform will ultimately be a burden in more fees and less access with the consumer being the benefactor of more burden in the system. The banks and government believe in quantity not quality is the best way to win in this game for benefit of self and not the consumer.