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talkpoliticsBy 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.
Re: error 404
Date: 1/10/11 19:05 (UTC)Re: error 404
Date: 1/10/11 19:07 (UTC)i don't think 404 is disagreeign with you for such reasons.
and again, dont necessarily change your mind, but i hope it makes you think it over. and then maybe, on your own, you'd change your mind.
Re: error 404
Date: 1/10/11 19:18 (UTC)Is there a cohesive, different argument not being presented that might sway me, or is the "you should be ashamed" case all that's left?
Re: error 404
Date: 1/10/11 19:22 (UTC)you are more willing to defend an already super-rich corporation doing somethign fucked up to keep it's massive profit-margin than to admit that sometimes, a company just cant keep making the kind of money it was making. sometimes, you only get a CEO bonus of 10 million, and not 50 million.
but that wouldn't bother you to disagree with; you're OK with a company gouging to keep it's profit margin, even when it's profit margin is so very far from breaking even, that should BOA lose a little profit cause they don't get as much per swipe, they'd still be making money for doing damn near nothing.
Re: error 404
Date: 1/10/11 19:30 (UTC)I'll revisit the last part of this in a second, but what makes transaction fees "fucked up," exactly?
sometimes, you only get a CEO bonus of 10 million, and not 50 million.
And you end up with a worse CEO. You forget that CEO compensation exists at the level it does because they must attract the best available. It's like an NFL quarterback - there are 30 teams, but maybe only 15-20 QBs that are really capable of starting a game. So you pay the good QBs more to entice them to your team. CEOs and large corporations are no different.
you're OK with a company gouging to keep it's profit margin
How are you defining "gouging?"
that should BOA lose a little profit cause they don't get as much per swipe, they'd still be making money for doing damn near nothing.
You've mentioned profit a number of times now. If I'm reading this right, BoA isn't actually profitable right now (http://finapps.forbes.com/finapps/jsp/finance/compinfo/Ratios.jsp?tkr=BAC). So if the issue is profit, well...
As it stands, it doesn't appear BoA is making a profit, though.
Re: error 404
Date: 1/10/11 19:35 (UTC)as does a bank NOT having free checking. TD can do it.
also, maybe BOA isn't making a profit--that link, to me, is mostly gibberish, i'll be honest. if you could provide me with a pie chart of their money in and money out, that i could prolly understand.
Re: error 404
Date: 1/10/11 19:37 (UTC)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.
Re: error 404
Date: 1/10/11 19:42 (UTC)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.
Re: error 404
Date: 1/10/11 19:48 (UTC)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.
Re: error 404
Date: 2/10/11 00:27 (UTC)http://www.nytimes.com/2010/01/05/your-money/credit-and-debit-cards/05visa.html?pagewanted=all
Re: error 404
Date: 2/10/11 00:45 (UTC)Well, it's not a simple free market because the government has made it so. But the bank has significant incentive to work with customers and with business - without those two cogs, the banks fail to exist.
Re: error 404
Date: 2/10/11 05:36 (UTC)Re: error 404
Date: 2/10/11 13:17 (UTC)Re: error 404
Date: 3/10/11 02:59 (UTC)