"They've got the Pow-a." Apologies to the German group Snap! for the song paraphrase. But today, with the announcement that Bank of America is dropping its $5 debit card fee plan, consumers are showing that they really do have the power.
This power first manifested itself in Netflix's August announcement of a 60% price increase that ultimately caused 800,000 people to ditch the service, and the company's stock price to drop nearly 40% overnight.
There's a big difference between Netflix's brouhaha and Bank of America's though. Netflix CEO Reed Hastings did do some backtracking but did not adjust the price increase down. B of A, however, has buckled under and canceled the fee. "We have listened to our customers very closely over the last few weeks and recognize their concern with our proposed debit usage fee," Bank of America Co-Chief Operating Officer David Darnell said in a statement.
The decision may have been influenced by the Bank Transfer Day campaign, started by 27-year-old Californian Kristen Christian on Facebook on October 4, which is encouraging people to close their bank accounts and move their money to credit unions on Saturday, Nov. 5. Today, the page has more than 33,000 likes. Just how many people will like the initiative enough to take action will be interesting to see.
Political pressure may have also played a part. U.S Sen. Richard Durbin, who is the author of "swipe fee" legislation that looks to reduce fees that banks charge retailers when customers swipe their cards, said that Bank of America's decision to can the $5 debit card charge was "an amazing victory" for consumers.
It was also an embarrassing blow to the bank, which is trying to right itself under the direction of embattled CEO Brian Moynihan. Perhaps what Bank of America needs is better leadership from its communications executives.