talkpolitics | 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:

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.

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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.

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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.

Flat | Top-Level Comments Only

no no, the transaction fee isn't what im discussing when i said fucked up. i was referring to the $5 monthly fee for using your debit card. that's the part that pisses me off.

My error, then.

With that said, then, BoA has to make up that money somehow. They have basic benchmarks to reach as best as possible. Why blame them when they didn't cause the problem to start?

as does a bank NOT having free checking. TD can do it.

I'm a TD Customer. If it no longer remains a competitive advantage, I don't expect them to have it for long.

never heard that the customer is always right, huh?

if TD starts charging me a monthly fee to use my card or for checking, i WILL tell them to fuck off and close my account.

again, if you can show me BoA's money in and money out, maybe i'd think differently. but somehow, i'd expect huge sums to be given as CEO compensation, and those sums suck money out of things that could be used to make the company more attractive to customers.

and yes, ive heard the "we need the big bucks to suck in the big talent" argument a hundred times before. problem is, people keep upping how much they offer--until the CEO makes more than 1000 employees do. and so when hard times hit, the CEO keeps his pay, but they fire the little guys. that's one reason the 99% are down at liberty plaza.

never heard that the customer is always right, huh?

At the end of the day, sure - but if/when most BoA customers just keep their accounts, will the customer still be right?

again, if you can show me BoA's money in and money out, maybe i'd think differently. but somehow, i'd expect huge sums to be given as CEO compensation, and those sums suck money out of things that could be used to make the company more attractive to customers.

That you do not like the fact that CEOs need to be paid big bucks doesn't change the fact that CEOs are paid big bucks.

and so when hard times hit, the CEO keeps his pay, but they fire the little guys

The CEOs are much more important, and much less interchangeable/expendible. That's why the little guy is fired when the times get tough.

And that's why most of the 99% isn't down there with the protesters - most are able to grasp that.

A Lesson in Unnecessary Regulation

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