Bank of America backs away from new fees; populists rejoice

posted at 5:31 pm on December 1, 2012 by Erika Johnsen

Businesses offer valuable goods and services in a marketplace, not out of philanthropy, but out of a desire to make money — which is great for consumers, because different businesses compete to supply our wants and needs and obtain our voluntary patronage at an efficient price. Specifically, we all use banks, credit unions, etcetera because they make it easier for us to manage our money, accrue interest, take out loans, and make purchases quickly and efficiently.

When the federal government steps in and decides to make it more costly for businesses to do what they do, however, that cost is always and inevitably transferred to us, the consumer.

The Obama administration and their cronies, of course, want us all to believe that we’re simply victims of corporate usury, and that the government is just here to help. Apparently, we’re to understand that banks have magical piles of ill-begotten cash hoarded in underground vaults from which they can and should draw when the government imposes myriad regulatory compliance costs that condescend to inform us all of what is and is not “fair” — which is pretty much exactly what the Dodd-Frank Wall Street Reform and Consumer Protection Act is. I’m not saying that there’s no place in this world for financial regulation, but Dodd-Frank is so encumbered with top-down control and unintended consequences, it’s egregious.

There was a huge uproar last fall when Bank of America and some other big banks announced that they were thinking about imposing monthly debit-card fees after lawmakers so auspiciously decreed the fair and proper amount (12 cents) that banks could charge retailers for debit-card interchange fees, via the Durbin Amendment, and the cap happened to be well below the industry average (44 cents). It was a move that retailers absolutely loved, but banks still had to figure out how to cover their transaction costs somehow. The major public outcry over the whole thing eventually got the banks to scrap the fee idea, but the problem remained, so it was once more unto the breach of finding ways to increase revenue. From the WSJ:

Bank of America Corp. BAC +0.31% has shelved plans for new fees that could have hit at least 10 million customers by the end of this year, skirting a potential replay of a 2011 uproar over consumer-banking charges.

The decision to hold off on new checking-account fees at least until late next year comes amid a sweeping review of the bank’s retail-banking business, said people familiar with the bank’s plans.

Many other big banks, including J.P. Morgan Chase and Wells Fargo have rolled out plans that aim to raise fee revenue or push customers to do more business with them as low interest rates, slow economic growth and tough new rules limit bank profits. …

Any move to increase fees in the post-financial-crisis climate is tricky. Bank of America retreated last fall from a monthly $5 debit-card charge following a customer revolt and a wave of criticism in Congress. The reversal, one of the worst fee debacles for a major lender since the 1990s, narrowed the bank’s options for new sources of income.

Take note, Obama administration — “narrowed the bank’s options for new sources of income,” as in, limiting their profitability a.k.a. their growth and the number of new jobs they can create.

I’ll never forget how aghast I was when I first heard President Obama say that “people have been using financial regulation as an excuse to charge consumers more” — the very idea is so woefully, insidiously wrong, but it’s a pretty apt summary of what his entire presidency has been about. Frightening, isn’t it?


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Krap bank!

KOOLAID2 on December 1, 2012 at 5:33 PM

They’ll make it up somewhere else. Maybe by continuing to understaff their branches.

22044 on December 1, 2012 at 5:34 PM

Take note, Obama administration — “narrowed the bank’s options for new sources of income,” as in, limiting their profitability a.k.a. their growth and the number of new jobs they can create.

…but don’t they know JugEars will bail them out?

KOOLAID2 on December 1, 2012 at 5:35 PM

I’ve heard that Wells Fargo is getting somewhat of a reputation for showing higher than actual account balances (particularly through ATMs readouts) to er, encourage overdrafts and the attending fees.

viking01 on December 1, 2012 at 5:41 PM

I’m surprised Obama’s go to bank for campaign funds, convention venues and Lord knows what else, has not been approved to raise fees without public uproar. If I remember correctly they were heavy into making mortgage loans to illegal aliens as part of the real estate debacle, along with Chase and CitiBank.

Night Owl on December 1, 2012 at 5:41 PM

It was a move that retailers absolutely loved, but banks still had to figure out how to cover their transaction costs somehow. The major public outcry over the whole thing eventually got the banks to scrap the fee idea, but the problem remained, so it was once more unto the breach of finding ways to increase revenue. From the WSJ:

I am a retailer, and I absolutely did NOT love it. The reason? The credit card processers immediately found a way to make up for the loss of some of that revenue. At the cost of only $59.95 per year, I now have the privilege of taking a required self-administered security check test of how well I control my employees’ access to any credit card info my business has. (Hint: I have no employees.) If I don’t take this test and, more importantly, pay the fee, I get charged $20.00 a month for being out of compliance. Now $59.95 may not sound like a whole heck of a lot, but I am a really, really small retailer and it is a big deal if I am forced to fork it over during one of my frequent financial crises. I’d just as soon the credit card processer took that bite slowly over the course of the year rather than in one big gulp. I also can’t wait to see what other goodies Dodd/Frank has in store for me both as a retailer and a consumer.

catsandbooks on December 1, 2012 at 5:45 PM

They’re still scum. Not surprising to have this story twisted by Erika, though. Sometimes I wonder if Hot Gas gets kickbacks from all the fencejumping.

mythicknight on December 1, 2012 at 5:47 PM

http://www.youtube.com/watch?v=KiiWO7MakG4

I can’t wait till the TEATERS can get their little mouths on this big bank hog. Just think how BOA has raped and pillaged the poor in this country with unjust fees and red-tape and denied those that just need a “fair shake” a chance at the “good life”.

Nationalize the banks, seize their assets, trust only the GREEDY POLITICIANS.


Forward….

PappyD61 on December 1, 2012 at 5:47 PM

BoA has very very serious structural problems in conjunction with very serious management problems and potentially mind-boggling liabilities.

It is the GM of Finance.

Thankfully it is still too big to fail.

CorporatePiggy on December 1, 2012 at 5:49 PM

still waiting for those bankers responsible for the libor fix to go to jail…

nathor on December 1, 2012 at 5:51 PM

I’m so sick of the word fair. Who said life was fair?

So sick of lazy, whiny, entitled, dumb, ignorant, pushy, morally bankrupt people with no personal responsibility getting to influence policy and the private sector.

I swear I am not going to make it 4 years. My head will explode.

gophergirl on December 1, 2012 at 5:51 PM

still waiting for those bankers responsible for the libor fix to go to jail…

nathor on December 1, 2012 at 5:51 PM

i really approve a new tax on banks for all the real crimes they do and never get caught. lets call it, the “we know you are stealing somewhere tax”

nathor on December 1, 2012 at 5:53 PM

“we know you are stealing somewhere tax”

nathor on December 1, 2012 at 5:53 PM

But…
Do you know they are stealing somewhere?
I would say so.

Close your account and don’t play.

You really do have a choice.

Electrongod on December 1, 2012 at 5:55 PM

i really approve a new tax on banks for all the real crimes they do and never get caught. lets call it, the “we know you are stealing somewhere tax”

nathor on December 1, 2012 at 5:53 PM

Please tell us why you hate banking customers.

22044 on December 1, 2012 at 6:01 PM

But…
Do you know they are stealing somewhere?
I would say so.

Close your account and don’t play.

You really do have a choice.

Electrongod on December 1, 2012 at 5:55 PM

for example, the libor fix, amounted to steal a little out of every libor indexed transaction. libor it underpins a huge part of our economy and i end up paying for it indirectly(by a slight inflation in every good that i buy from companies that do use libor idexed credit). and this was the one that was found out, god know where else they are stealin…

nathor on December 1, 2012 at 6:02 PM

still waiting for those bankers responsible for the libor fix to go to jail…

nathor on December 1, 2012 at 5:51 PM

It’s the Benghazi of the banking world, huh?

Night Owl on December 1, 2012 at 6:03 PM

Please tell us why you hate banking customers.

22044 on December 1, 2012 at 6:01 PM

remenber too big to fail financial institutions that we bailed out with our taxes? I have nothing against banking customers, but I wont let them be hostage of banks…

nathor on December 1, 2012 at 6:06 PM

It’s the Benghazi of the banking world, huh?

Night Owl on December 1, 2012 at 6:03 PM

times 1000
http://www.economist.com/node/21558281

nathor on December 1, 2012 at 6:07 PM

remenber too big to fail financial institutions that we bailed out with our taxes? I have nothing against banking customers, but I wont let them be hostage of banks…

nathor on December 1, 2012 at 6:06 PM

you may not like big banks (most people don’t) – but you understand what happens if discretionary taxes are levied on them, do you not?

22044 on December 1, 2012 at 6:08 PM

nathor on December 1, 2012 at 6:07 PM

Who died?

Fallon on December 1, 2012 at 6:13 PM

Since BofA seems to have been such a strong supporter of Obama and the dems, I have zero sympathy for the problems they have caused themselves by supporting the regulatory morass in which they find themselves. Did they really think that by being the big bank getting in bed with big government that the foxes in the government would only eat the little chickens? Those were just appetizers. Just wait until the executives at the “too big to fail” banks find out that they are no longer useful when the government decides that the bank policies are too adverse and unfair to the common person, so the government, as an extension of the Fed will take over the banks and run them as government entities. The boards of the banks will be run by political appointees. … kind of like GM being run by somebody who had never even been in the auto industry after the government took it over.

AZfederalist on December 1, 2012 at 6:14 PM

you may not like big banks (most people don’t) – but you understand what happens if discretionary taxes are levied on them, do you not?

22044 on December 1, 2012 at 6:08 PM

so, there is no justice for all the shit they do hmm? somehow I dont care, I just want to see bankers poorer even if it cost all of us a little. justice comes with a price on this one.

nathor on December 1, 2012 at 6:14 PM

Who died?

Fallon on December 1, 2012 at 6:13 PM

the weak faith on the global banking industry died.

nathor on December 1, 2012 at 6:20 PM

justice comes with a price on this one.

nathor on December 1, 2012 at 6:14 PM

Are you willing to bear it?

Doubt it.

CorporatePiggy on December 1, 2012 at 6:20 PM

so, there is no justice for all the shit they do hmm? somehow I dont care, I just want to see bankers poorer even if it cost all of us a little. justice comes with a price on this one.

nathor on December 1, 2012 at 6:14 PM

So don’t do business with the big banks. Use the small local banks. Oh, you can’t do that can you? All those regulations imposed by the regime you support and previous statists have driven them out of business and they have had to be absorbed by the big banks.

Shame really. Sucks to be you.

AZfederalist on December 1, 2012 at 6:23 PM

It’s amusing that Erika thought she would find some love for big banks and some sympathy for their problems among HA readers.

There’s good reason for the cold shoulder. I remember trying to find the transaction fee for those 0% credit card offers before the Credit Card Act of 2009 (I think it was that law that changed things) and seeing it in like 4-point type at the end among the fine print. The transaction fee, of course, amounted to 100% of the real interest cost, and it was shameful that the banks could get away with hiding it. I’m sure there’s a free market argument against making banks put it up front in type the same size as the offer, but I’m happy with what the government has done.

Peter Beinart of The New Republic wrote a piece some months ago on the success of the surge in Iraq, making the point from his lefty perspective that not everything Republicans do is wrong and stupid and not everything Democrats do is right and wise. We need to remember the reverse goes for us too.

bobs1196 on December 1, 2012 at 6:26 PM

Are you willing to bear it?

Doubt it.

CorporatePiggy on December 1, 2012 at 6:20 PM

yes I am! really!

nathor on December 1, 2012 at 6:27 PM

remenber too big to fail financial institutions that we bailed out with our taxes? I have nothing against banking customers, but I wont let them be hostage of banks…

nathor on December 1, 2012 at 6:06 PM

Then write a strongly worded letter to our King, Barrack Obama and tell him that you are a weak individual and need some love..

That’s what people do when they have no other avenue..

Electrongod on December 1, 2012 at 6:27 PM

yes I am! really!

nathor on December 1, 2012 at 6:27 PM

Revenge is poison meant for others that we swallow ourselves.

Knowing that, are you still certain?

CorporatePiggy on December 1, 2012 at 6:29 PM

I am a retailer, and I absolutely did NOT love it. The reason? The credit card processers immediately found a way to make up for the loss of some of that revenue. At the cost of only $59.95 per year, I now have the privilege of taking a required self-administered security check test of how well I control my employees’ access to any credit card info my business has. I also can’t wait to see what other goodies Dodd/Frank has in store for me both as a retailer and a consumer.

catsandbooks on December 1, 2012 at 5:45 PM

This!! I am the administrator for a small nonprofit. We aren’t even smart enough to cheat. In switching credit card processing companies we got stuck keeping two processing accounts active, and had to pay this same $60 fee twice for the same silly little credit card machine.

Dodd/Frank are more like Butch and Sundance.

STL_Vet on December 1, 2012 at 6:31 PM

So don’t do business with the big banks. Use the small local banks.

you can have a libor indexed loan with your small bank and big banks would still be ripping you off.

Oh, you can’t do that can you? All those regulations imposed by the regime you support and previous statists have driven them out of business and they have had to be absorbed by the big banks.

so, are you telling me that big banks ended up having the regulations favoring them by eliminating small banks competition? another reason for the “I know you are stealin somewhere tax”!

Shame really. Sucks to be you.

AZfederalist on December 1, 2012 at 6:23 PM

no, it sucks not to be a banker!!!

nathor on December 1, 2012 at 6:32 PM

Knowing that, are you still certain?

CorporatePiggy on December 1, 2012 at 6:29 PM

Given that he gives the strong impression of not knowing what adulthood is… I doubt it.

viking01 on December 1, 2012 at 6:32 PM

so, there is no justice for all the shit they do hmm? somehow I dont care, I just want to see bankers poorer even if it cost all of us a little. justice comes with a price on this one.

nathor on December 1, 2012 at 6:14 PM

big bankers don’t get poorer as long as they’re in cahoots with a big federal government. you’ll need to think outside the box if you want justice!

22044 on December 1, 2012 at 6:34 PM

I am a retailer, and I absolutely did NOT love it. The reason? The credit card processers immediately found a way to make up for the loss of some of that revenue. At the cost of only $59.95 per year, I now have the privilege of taking a required self-administered security check test of how well I control my employees’ access to any credit card info my business has. I also can’t wait to see what other goodies Dodd/Frank has in store for me both as a retailer and a consumer.

catsandbooks on December 1, 2012 at 5:45 PM

This!! I am the administrator for a small nonprofit. We aren’t even smart enough to cheat. In switching credit card processing companies we got stuck keeping two processing accounts active, and had to pay this same $60 fee twice for the same silly little credit card machine.

Dodd/Frank are more like Butch and Sundance.

STL_Vet on December 1, 2012 at 6:31 PM

Great posts!

22044 on December 1, 2012 at 6:35 PM

Then write a strongly worded letter to our King, Barrack Obama and tell him that you are a weak individual and need some love..

That’s what people do when they have no other avenue..

Electrongod on December 1, 2012 at 6:27 PM

love? what I need its a pitchfork!

nathor on December 1, 2012 at 6:37 PM

big bankers don’t get poorer as long as they’re in cahoots with a big federal government. you’ll need to think outside the box if you want justice!

22044 on December 1, 2012 at 6:34 PM

pitchforks?

nathor on December 1, 2012 at 6:38 PM

Bank of America backs away from new fees; populists rejoice

As a socially conservative populist, let me be the first to say: HUZZAH!

Imagine, now I can use my own money without being charged an additional fee for accessing my own money. Why, it’s just like yesterday!

And to think, this great service comes from a bank which already gives me scant interest, and came begging for TARP money! Wowzas!

Take note, Obama administration — “narrowed the bank’s options for new sources of income,” as in, limiting their profitability a.k.a. their growth and the number of new jobs they can create.

And tell me, how many jobs does charging me for access to my own money create, hmm? If you’re going to tell me that taxing my income doesn’t create jobs, then how is it that a debit card fee creates jobs?

Stoic Patriot on December 1, 2012 at 6:39 PM

pitchforks?

nathor on December 1, 2012 at 6:38 PM

your call…but Occupy Wall Street tried something like that and they went down twinkles

22044 on December 1, 2012 at 6:40 PM

remenber too big to fail financial institutions that we bailed out with our taxes? I have nothing against banking customers, but I wont let them be hostage of banks…

nathor on December 1, 2012 at 6:06 PM

First, the idea that you won’t let them be hostage of banks is laughable. You have limited power to compell the behaviour of either banks, or their customers.

Second, you’ve evidently failed to grasp the most obvious point; the cost of business falls, inevitably and inexorably, onto the consumer. He can then choose; pay, and play, or withdraw.

massrighty on December 1, 2012 at 6:41 PM

love? what I need its a pitchfork!

nathor on December 1, 2012 at 6:37 PM

You’d hurt yourself.

viking01 on December 1, 2012 at 6:42 PM

Revenge is poison meant for others that we swallow ourselves.

Knowing that, are you still certain?

CorporatePiggy on December 1, 2012 at 6:29 PM

let me put it this way, they stole from us, they are stealing from us, and they will continue to still from us for the foreseeable future.
what you are saying amounts to telling a slave not to hurt its master while fighting for his freedom because revenge is poison meant for others that we swallow ourselves.

nathor on December 1, 2012 at 6:44 PM

The poor simpleton can’t even see how much Barky has stolen from him (or his parents, more likely).

viking01 on December 1, 2012 at 6:49 PM

First, the idea that you won’t let them be hostage of banks is laughable. You have limited power to compell the behaviour of either banks, or their customers.

Second, you’ve evidently failed to grasp the most obvious point; the cost of business falls, inevitably and inexorably, onto the consumer. He can then choose; pay, and play, or withdraw.

massrighty on December 1, 2012 at 6:41 PM

withdraw? this is not choosing detergent A instead of detergent B. you cannot withdraw from libor or from the dollar or from many things big bank play with and affect you directly or indirectly and if they “scam the markets” they are effectively taxing the whole economy(you and me) and its revolting!

nathor on December 1, 2012 at 6:50 PM

nathor on December 1, 2012 at 6:02 PM

If you are upset at the libor bru-ha-ha then you must really be incensed at the FED’s QEs. Neither are right but the FED is literally destroying are currency before our eyes and it is perfectly legal.

chemman on December 1, 2012 at 6:50 PM

withdraw? this is not choosing detergent A instead of detergent B. you cannot withdraw from libor or from the dollar or from many things big bank play with and affect you directly or indirectly and if they “scam the markets” they are effectively taxing the whole economy(you and me) and its revolting!

nathor on December 1, 2012 at 6:50 PM

What solution would you offer, then? Nationalize the banks? Increase the regulatory burden (because that lowers fees, right?) What do you propose?

massrighty on December 1, 2012 at 6:53 PM

your call…but Occupy Wall Street tried something like that and they went down twinkles

22044 on December 1, 2012 at 6:40 PM

if they could just crap the banking CEO table instead of the police car…
ok, pithforks went down twinkles, any other idea? or just eat shit and shut up as usual?

nathor on December 1, 2012 at 6:57 PM

nationalize the banks and put John Corzine in charge

Slade73 on December 1, 2012 at 6:58 PM

nathor on December 1, 2012 at 6:57 PM

take care of your family & loved ones, and your neighbors if you have the resources…and quit having fantasies about the little guy sticking it to the big guy.

ain’t gonna happen.

22044 on December 1, 2012 at 6:59 PM

What solution would you offer, then? Nationalize the banks? Increase the regulatory burden (because that lowers fees, right?) What do you propose?

massrighty on December 1, 2012 at 6:53 PM

I think he’s hoping Santa will somehow save him…

Elves of the World unite ??

viking01 on December 1, 2012 at 7:00 PM

nathor on December 1, 2012 at 6:50 PM

boy, i bet you are really upset about the E15 stuff coming out to enrich the farmers and agribusiness

and i bet you were howling mad when BAC was ‘asked’ to buy Merril Lynch.

and, i suppose you know that 2000 small banks are expected to close because of the new regs…right?…and of course they will be consolidated into bigger banks

oh, and that business about Countrywide’s special VIP loans for Senators (and obviously you know that BAC bought Countrywide…which was very stupid of them)

And, btw, as long as we’re talking about Countrywide, what are your opinions about Golden West Financial?

r keller on December 1, 2012 at 7:02 PM

What solution would you offer, then? Nationalize the banks? Increase the regulatory burden (because that lowers fees, right?) What do you propose?

massrighty on December 1, 2012 at 6:53 PM

regulations could be done more smart but with all the lobbying big banks do, I doubt congress could do this regulations right.
nationalize the banks? only as a temporary solution. freddie mac’s are also poisonous to the system.
we can also break up the big banks…

nathor on December 1, 2012 at 7:04 PM

take care of your family & loved ones, and your neighbors if you have the resources…and quit having fantasies about the little guy sticking it to the big guy.

ain’t gonna happen.

22044 on December 1, 2012 at 6:59 PM

with that mentality, we would still be calling some idiot in England our king.

nathor on December 1, 2012 at 7:08 PM

What solution would you offer, then? Nationalize the banks? Increase the regulatory burden (because that lowers fees, right?) What do you propose?

massrighty on December 1, 2012 at 6:53 PM

regulations could be done more smart but with all the lobbying big banks do, I doubt congress could do this regulations right.
nationalize the banks? only as a temporary solution. freddie mac’s are also poisonous to the system.
we can also break up the big banks…

nathor on December 1, 2012 at 7:04 PM

1. Regulations brought us here; it’s doubtful that more regs will somehow fix the problem. We have evidence that, as regulations increase (along with the attendant regulatory cost,) the costs are passed to the consumer.
2. The government does nothing temporary; witness the tax that was recently repealed, whose purpose was to pay for the Spanish American War.
3. we can also break up the big banks… is a statist solution that smacks of the idea that somehow, the big daddy government can spank the bank.

massrighty on December 1, 2012 at 7:10 PM

r keller on December 1, 2012 at 7:02 PM

angry with all of those. so what to do?

nathor on December 1, 2012 at 7:12 PM

nathor on December 1, 2012 at 7:08 PM

ok – you initially call for big government “solutions” and in the next breath you want revolution?

dude…you’re tying yourself in knots!

22044 on December 1, 2012 at 7:14 PM

angry with all of those. so what to do?

nathor on December 1, 2012 at 7:12 PM

Go back in your mom’s basement, obviously.

viking01 on December 1, 2012 at 7:15 PM

Oh, BoA is finding ways to cope with the new regs. This month, it started charging a $10. fee to transfer funds from a designated overdraft protection account into checking.

sandspur on December 1, 2012 at 7:16 PM

1. Regulations brought us here; it’s doubtful that more regs will somehow fix the problem. We have evidence that, as regulations increase (along with the attendant regulatory cost,) the costs are passed to the consumer.

not more regulation, but smarter regulation, that manages to really hurt big banks ability to rip us off without hurting smaller banks. maybe its not possible, but better to try that than the status quo.

2. The government does nothing temporary; witness the tax that was recently repealed, whose purpose was to pay for the Spanish American War.

its still a hot topic but the government was recently owner of some car companies and is no more. by the way, freddie mac should be privatized.

3. we can also break up the big banks… is a statist solution that smacks of the idea that somehow, the big daddy government can spank the bank.

massrighty on December 1, 2012 at 7:10 PM

why not? better than eat shit from the big banks.

nathor on December 1, 2012 at 7:17 PM

ok – you initially call for big government “solutions” and in the next breath you want revolution?

dude…you’re tying yourself in knots!

22044 on December 1, 2012 at 7:14 PM

I am not coherent here in the solutions, I know, but I am angry and want something done and this “oh, poor big banks are being bothered by big bad goverment” attitude is really a non starter with me.

nathor on December 1, 2012 at 7:22 PM

Oh, BoA is finding ways to cope with the new regs. This month, it started charging a $10. fee to transfer funds from a designated overdraft protection account into checking.

sandspur on December 1, 2012 at 7:16 PM

Wow, that’s like charging an ATM fee to your own customers. Maybe even worse.

22044 on December 1, 2012 at 7:23 PM

I am not coherent here in the solutions, I know, but I am angry and want something done and this “oh, poor big banks are being bothered by big bad goverment” attitude is really a non starter with me.

nathor on December 1, 2012 at 7:22 PM

The correct point is the opposite. Big government is in cahoots with big banks. You like one, you like the other. The converse is true as well.

22044 on December 1, 2012 at 7:24 PM

If you are upset at the libor bru-ha-ha then you must really be incensed at the FED’s QEs. Neither are right but the FED is literally destroying are currency before our eyes and it is perfectly legal.

chemman on December 1, 2012 at 6:50 PM

there is still a bit of Keynesian in me…

nathor on December 1, 2012 at 7:30 PM

this “oh, poor big banks are being bothered by big bad goverment” attitude is really a non starter with me.

nathor on December 1, 2012 at 7:22 PM

You seem to miss the points being made here. The overall sentiment here is not for “oh those poor big banks”, it is more the realization that those big banks are not going to do anything that causes them to lose money. When new regulations are implemented, it is the banks’ customers who will pay for the implementation and execution of those regulations, not some magical stash that the evil big bank is just sitting upon. … and you see, all those regulations, pushed by the politicians you love? The big banks are able to raise their fees, etc. to recoup the fees. The smaller banks? They can’t do so because the big banks set the market price and are able to absorb the regulations at a lower per account cost than the small banks due to the size of the big banks; the smaller banks have to adapt to the market price and are thus squeezed until they are forced out of business.

So all that regulation that you love? It’s giving the big banks the opportunity to get even bigger while forcing the smaller banks out of business.

But you go ahead and keep supporting statists, eventually you’ll get enough regulations to really stick it to those big evil corporations. Of course, by that time it will be stick it to THE big corporation that has absorbed everything else before the government gobbles it up.

AZfederalist on December 1, 2012 at 7:32 PM

The correct point is the opposite. Big government is in cahoots with big banks. You like one, you like the other. The converse is true as well.

22044 on December 1, 2012 at 7:24 PM

another reason to break the big banks, its much more simple to break the banks than to scale down the government and I take the solution that is possible.

nathor on December 1, 2012 at 7:33 PM

another reason to break the big banks, its much more simple to break the banks than to scale down the government and I take the solution that is possible.

nathor on December 1, 2012 at 7:33 PM

your choice to keep indulging fantasies. have a good one.

22044 on December 1, 2012 at 7:36 PM

But you go ahead and keep supporting statists, eventually you’ll get enough regulations to really stick it to those big evil corporations. Of course, by that time it will be stick it to THE big corporation that has absorbed everything else before the government gobbles it up.

AZfederalist on December 1, 2012 at 7:32 PM

if there was a law that broke up the big banks AND privatized freddy and fanny, would it be ok with you?

nathor on December 1, 2012 at 7:37 PM

if there was a law that broke up the big banks AND privatized freddy and fanny, would it be ok with you?

nathor on December 1, 2012 at 7:37 PM

Try this, instead; repeal the damnable regulations that create the environment where it’s hard to be a small/local/community bank.

Then, smaller, more responsive banks can open, and thrive, taking customers from the big banks, which become smaller, and, of necessity, more competitive/responsive.

You’re short on solutions because you choose not to see a solution.

massrighty on December 1, 2012 at 7:44 PM

if there was a law that broke up the big banks AND privatized freddy and fanny, would it be ok with you?

nathor on December 1, 2012 at 7:37 PM

Fanny and Freddy need to find a room..
.
.
You and you only need to be the judge of what is right when it comes to investing..or banking..

Take the blinders off..

Turn off that TV..

Electrongod on December 1, 2012 at 7:49 PM

Try this, instead; repeal the damnable regulations that create the environment where it’s hard to be a small/local/community bank.

Then, smaller, more responsive banks can open, and thrive, taking customers from the big banks, which become smaller, and, of necessity, more competitive/responsive.

You’re short on solutions because you choose not to see a solution.

massrighty on December 1, 2012 at 7:44 PM

but lack of regulations would allow investment banks that are by nature, very large, to invent new things to screw the economy like the CDS’s that goldman sachs created.
your solution of deregulation the financial markets in the hope that small banks would take business from big banks while allowing those same big banks( who now really dominate the market) to completely screw the economy again seems a bit of a fantasy. I dont think this is the solution.

nathor on December 1, 2012 at 7:55 PM

if there was a law that broke up the big banks AND privatized freddy and fanny, would it be ok with you?

nathor on December 1, 2012 at 7:37 PM

Others have pointed out the solution to the big bank problem. Divesting freddie and fannie are the right thing to do. Those entities should never have existed to begin with and were a contributing cause to the housing & mortgage crash that have led to the current economic conditions.

AZfederalist on December 1, 2012 at 8:03 PM

but lack of regulations would allow investment banks that are by nature, very large, to invent new things to screw the economy like the CDS’s that goldman sachs created.
your solution of deregulation the financial markets in the hope that small banks would take business from big banks while allowing those same big banks( who now really dominate the market) to completely screw the economy again seems a bit of a fantasy. I dont think this is the solution.

nathor on December 1, 2012 at 7:55 PM

Real simple. If the big banks screw up, don’t bail them out. That’s the way the free market works. If those banks know that they won’t be receiving any handouts if they make risky decisions that turn out badly, they start being more conservative and discerning in the actions they take.

AZfederalist on December 1, 2012 at 8:05 PM

nathor on December 1, 2012 at 7:55 PM

i had to go away for a while, so didn’t respond. nathor, you are the tail of a wagging dog. The dog is not capitalism. What you are upset about is an heavily regulated industry that was constricted into the march toward social justice

the dog nathor is state-run capitalism…for the people.

lets go somewhere simpler. Ethanol gasoline in small engines. that does damage…and people get unhappy with the results. so if you go to the web you will find some people blaming the oil industry…because it is NOT ethanol, it is the catalyst that makes the blend work.

well, no. The problem is that local, state, federal governments have mandated ethanol. that’s the reason. but it is easier to blame Industry for my small engine to need repair.

think this way…we are in a post-capitalist era. No oil company is going to sell you something that screws up your engine. Bad for business…right?

No bank is going to give out bad loans…unless someone has a gun to their head.

i’m surprise you haven’t brought up Glass-Steagall. Well, just in case you were wondering

“Today, Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,” then-Treasury Secretary Lawrence H. Summers said at the time. “This historic legislation will better enable American companies to compete in the new economy.”

But 10 years later, the end of Glass-Steagall has been blamed by some for many of the problems that led to last fall’s financial crisis. While the majority of problems that occurred centered mostly on the pure-play investment banks like Lehman Brothers, the huge banks born out of the revocation of Glass-Steagall, especially Citigroup, and the insurance companies that were allowed to deal in securities, like the American International Group, would not have run into trouble had the law still been in place.

“Commercial banks played a crucial role as buyers and sellers of mortgage-backed securities, credit-default swaps and other explosive financial derivatives,” Demos, a nonpartisan public policy and research organization, wrote in a report discussing the problems it said were caused by the repeal of Glass-Steagall.

“Without the watering down and ultimate repeal of Glass-Steagall, the banks would have been barred from most of these activities,” Demos said. “The market and appetite for derivatives would then have been far smaller, and Washington might not have felt a need to rescue the institutional victims.”

Today, President Obama seems to have softened his views a bit when it comes to Glass-Steagall. The administration’s proposal for overhauling financial regulatory system makes no mention of resurrecting the firewall between commercial banks and investment banks and still allows insurance companies to deal in securities. The change of heart may have something to do with the fact that one of his senior economic advisers is Mr. Summers.

http://dealbook.nytimes.com/2009/11/12/10-years-later-looking-at-repeal-of-glass-steagall/

so what to do?…well, first of all lets start by talking about the deep corruption of the Dem part…and their Failures.

they are not your friends nathor

r keller on December 1, 2012 at 8:37 PM

Now $59.95 may not sound like a whole heck of a lot, but I am a really, really small retailer and it is a big deal if I am forced to fork it over during one of my frequent financial crises.
catsandbooks on December 1, 2012 at 5:45 PM

This response is very late (I’m a retailer too, antique store, and am just now getting home) so you may not see it.

I have had to take the idiotic “compliance test” also. What a freaking joke! You just answer yes, duh. In any case, I have never had to pay a fee to take the test just the non-compliance fee of $20/mo. You need to tell your processor to waive that fee or else you will find a new processor. And if your biz calls are anything like ours, every other sales call is some jerkoff trying to get you to switch cc processors! And if you have a contract, just tell them that the new people you have been talking to are willing to buy out your contract because many of them will.

Good luck! In this freaking economy we all need it!

mrsmwp on December 1, 2012 at 10:20 PM

I just want to see bankers poorer even if it cost all of us a little. justice comes with a price on this one.

nathor on December 1, 2012 at 6:14 PM

Wow. Will you be the one in the front rank waving a huge red flag?

GWB on December 1, 2012 at 11:38 PM

I am not coherent here in the solutions, I know, but I am angry

nathor on December 1, 2012 at 7:22 PM

That’s quite enough Nathor, thank you.

Ladies and Gentlemen. Have a good look at that quote. This is what you have to evaluate, adapt, and overcome.

CorporatePiggy on December 2, 2012 at 12:01 AM

I am a retailer, and I absolutely did NOT love it. The reason? The credit card processers immediately found a way to make up for the loss of some of that revenue. At the cost of only $59.95 per year, I now have the privilege of taking a required self-administered security check test of how well I control my employees’ access to any credit card info my business has. I also can’t wait to see what other goodies Dodd/Frank has in store for me both as a retailer and a consumer.

catsandbooks on December 1, 2012 at 5:45 PM

This!! I am the administrator for a small nonprofit. We aren’t even smart enough to cheat. In switching credit card processing companies we got stuck keeping two processing accounts active, and had to pay this same $60 fee twice for the same silly little credit card machine.

Dodd/Frank are more like Butch and Sundance.

STL_Vet on December 1, 2012 at 6:31 PM

I actually manage the credit card processing dept at a community bank and know more than any sane person would want to about the Durb amend and fee cap.

The security check fee the first poster referenced (PCI SAQ) was around before the fee cap and is in no way mandated by the government or banks. That one is all on visa and MasterCard. I agree it is a tremendous nuisance but you should be able to find a processing provider that charges less than $60 per year to help you with that (or in my banks case- nothing at all). I would recommend finding a new company.

The second poster shouldn’t have to pay anything either. There are tons and tons of processors (a lot of bad ones too) so be sure to do your homework and ask for 5 local businesses that have used their service more than a year. Also go with someone local like a community bank. They are more accountable ifs they try to hit you with those fees.

Now all that said- there was a fee recently implemented that was a direct cause of the cap. It is called the Visa FANF (fixed acquirer network fee). It is a monthly fee charged based on the volume of “not present” transactions a business runs in a month and number of locations and can range from $2.9 per month to $30000. Most small biz I help are getting a new $9-$15 monthly charge from FANF. The $30k is for companies like amazons size… But that’s per month.

Govt interference (in this case with help from large corps) end up costing everyone else more yet again.

Sam Rocket on December 2, 2012 at 4:35 AM

How the heck does BOA stay in business?

Oh, that’s right…we bailed them out.

Never mind.

Dr. ZhivBlago on December 2, 2012 at 3:07 PM

I just want to see bankers poorer even if it cost all of us a little. justice comes with a price on this one.

nathor on December 1, 2012 at 6:14 PM

Wow. Will you be the one in the front rank waving a huge red flag?

GWB on December 1, 2012 at 11:38 PM

Nathor has a point. If these banks stood on their own within the free enterprise model, then I would say that if you don’t like how they do business, then don’t do business with them (I recently got rid of my BOA Visa card that I’ve had for more than 25 years).

The problem is that BOA and other banks are so tied in to our government that it’s a quasi-socialist model. Remember, these are one of the “too big to fail” banks, and if they went under, one of the other TBTF banks would take over and do the same stuff all over again…all with the blessings and assistance of Uncle Sam.

Dr. ZhivBlago on December 2, 2012 at 3:11 PM

First of all, this is not a case of individual poor little banks having to stop their growth or hire less people because they can’t make enough off of your debit card.

Banks pushed hard to narrow the number of card exchanges to just one — so no matter which bank we go to, we don’t really have a choice any more as to what the fees will be. The existing banks worked hard to get the Government to issue onerous regulations to prevent new card exchanges from appearing in the market. They worked hard to prevent credit unions and savings and loan companies from offering the same transaction services as banks — while I have infinite electronic transaction rights at a bank, I am limited to six per month at my credit union. This is collusion in monopoly does not win the banks me as a friend.

Anyone remember “free checking”? Why were the banks able to offer an unlimited number of free transactions as long as you kept a certain amount on deposit at the bank? The answer is obvious — the bank was making more than enough money off of your deposit to both pay you the interest on the deposit and to cover the transactions costs of your checking account.

The banks worked hard to get you to give up paper checks and move to debit cards, claiming that the lower costs of electronic transactions would translate into both increased profits to the bank and improved services to the customer.

As they did so, they also worked hard to limit their liability for debit card scams — debit cards do not have the consumer protections that credit cards do — a bank is not obligated to return money to a customer who has had it stolen via debit card scams.

I used to use my debit card in many places, but the writing was on the wall with the ATM fees and such, so now I use a credit card for everything, and pay the balance to zero each month. The banks don’t charge me a thing (I keep an account filled up with the money they demand for a charge-free credit card), and I get scam protection, I get 3% back on my purchases at the end of the year, and I get an extended warranty on the purchase as well as the ability to deny payment to a merchant who fails to deliver that which they advertised. None of these are available with a debit card, which really functions exactly like a paper check.

unclesmrgol on December 2, 2012 at 3:38 PM