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talkpolitics2011-09-30 12:57 pm
badlydrawnjeff.livejournal.com) wrote in talkpolitics2011-09-30 12:57 pm
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A Lesson in Unnecessary Regulation
By now, you've probably heard about Bank of America's plan to begin charging $5/month on the customer side for debit card usage. What you probably haven't heard of is why:
This follows many banks ending free checking in large part to the regulations in the Dodd-Frank bill limiting debit overdraft fees. This will likely not be the last time we see banks making more adjustments, either.
Regulations matter. The negative impact of regulatory action when it's not needed only ends up hurting the rest of us in the long run. In a misguided rush by the left to "protect" the population from evil, predatory banks, all you've done is now made it harder for those who you profess to represent and care about the most to use banking services. Congratulations on another job well done.
NEW YORK (Dow Jones)--Bank of America Corp. (BAC), the largest U.S. bank by assets, plans to charge customers a $5 monthly fee for making debit card purchases starting early next year, according to an internal memo sent to bank executives Thursday.
...
Bank of America is trying to cushion revenue losses it expects to incur from new caps on the fees merchants pay when a customer uses a debit card at their stores. In June, the Federal Reserve Board finalized rules capping such fees at 24 cents per transaction, compared with a current average of 44 cents.
...
Other banks have introduced or are testing new fees in response to the debit fee caps, which stem from a provision known as the Durbin amendment in last year's Dodd-Frank financial regulation overhaul legislation.
This follows many banks ending free checking in large part to the regulations in the Dodd-Frank bill limiting debit overdraft fees. This will likely not be the last time we see banks making more adjustments, either.
Regulations matter. The negative impact of regulatory action when it's not needed only ends up hurting the rest of us in the long run. In a misguided rush by the left to "protect" the population from evil, predatory banks, all you've done is now made it harder for those who you profess to represent and care about the most to use banking services. Congratulations on another job well done.
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Look, I am all for responsibility, but one bank I dealt with, we will call it Patriot Bank, would bust you if you overdrew your account. That was fine, except they would bounce a check if it was one red penny over what you had, fine you $35, take the money out of your account paying what was over drafted, and taking the $35, out of the account incurring another $35 fee. Grand total for one bad check was $70. One other trick this bank pulled, and I know many banks will do this, they would debit your account before crediting a deposit, lots of overdraft fees in doing that. Good luck if it was an error on their part, you still had the privilege of paying those fees.
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