Bank of America Corp (BAC), Wells Fargo & Co (WFC): Consumers Should Stop Whining About Bank Fees

For example:

Imagine a 100-spot parking garage. There are rules: If you arrive before 9:00 am and leave before 6:00 pm, then parking is completely free. However, if you fail to leave by 6:00 pm, you are charged $20. On average, let’s say 5 people neglected to remove their cars by 6:00 pm each day – so the garage would collect $100 in revenue per day.

After being charged a few times, some parkers begin to complain to fellow parkers about the greedy garage owner and gather enough support to force the garage regulator to enact a rule that doesn’t allow the garage owner to charge $20 for unmoved cars.

Having seen his income go from $100 per day to $0, the garage owner is concerned. In order to keep his garage profitable, the owner decides to now charge every customer $1 per day, regardless of when they arrive or leave. This will surely annoy most of the parkers, but their support for the abolishment of the $20 fee may have been misguided and ultimately backfired.

Should banks just give up?
Now, am I suggesting we weep for the bankers that lost out on some revenue? No. But executives at these banks were selected by the board of directors to serve shareholders’ best interests. The management teams at these banks cannot just simply shrug their shoulders and say, “Oh well, it looks like revenue is going to be lower from now on” and head to the golf course. These bank leaders have an obligation to shareholders to innovate and find new ways to drive the business forward, and for better or worse, charging new fees is one of those solutions.

The article Consumers Should Stop Whining About Bank Fees originally appeared on Fool.com.

David Hanson has no position in any stocks mentioned. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America and Wells Fargo.

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