Quote :

"Banks make money from each debit card transaction. So please tell me how a $5 charge is "necessary" to provide the funding for the infrastructure that allows such transactions to begin with."

it's necessary because prior to Dodd-Frank (and the Durbin language), banks were able to charge a market rate to pay for their debit programs. Durbin proposed to cap the swipe fee at a rate below what it costs most banks to run their programs and would have been even worse had the Fed not gone very easy on the final rule that was required out of the Durbin language.

In normal economic times under a rule like this, banks like BoA COULD run their programs as a loss leader, but for even mid-sized regional banks, they were likely breaking even, and smaller banks were most definitely doing just that in order to attract business through staying competitive. However, BoA is also bleeding like a stuck pig in a very perilous economic environment, so of course they're not going to absorb the cost.

Banks may have made a small profit above operating costs (normal for providing a service) from debit processing prior to Dodd-Frank, allowing them to pay for their debit card programs, but they sure as shit don't anymore.

10/5/2011 10:11:32 AM

Quote :

"^but they likely would not be charging this fee if it weren't for the new law limiting transaction fees to merchants. does BOA have to charge this to still earn money via debit transactions? of course not. they're losing one revenue stream so they're trying to create another. either way, it's being passed on to consumers; however, consumers don't appreciate a direct fee. when it was hidden (via charging the merchant) consumers were ignorant to the fee. however, I highly doubt we see a decrease in product prices due to the lower transaction fee, so in the end, this law does nothing but increase costs for BOA customers."

exactly. Well said. Durbin just took a system that WORKED openly and consumers liked and changed an industry overnight. Now they are adapting and passing the Durbin fee onto its customers and he is pissy about being called on it and encourages a run on a US bank.

10/5/2011 10:11:44 AM

^^I don't remember the source, but I swore that I heard one bank CEO saying that it costs them about $0.13 for a debit transaction

10/5/2011 10:15:12 AM

http://articles.chicagotribune.com/2011-10-01/news/ct-edit-durbin-20111001_1_interchange-fees-debit-cards-retailers

I read that banks made about 2B off these fees each year.

"Bankers told Durbin and his fellow lawmakers last year that the interchange fees subsidize free checking accounts and other services, including the convenient practice of making purchases with debit cards at no charge to the buyer. Slash fees to retailers, the banks said, and they would likely recoup the lost revenue by charging their customers for use of the cards."

Just as I have seen my bank fees go up since this law passed and many banks are no longer offering free checking. (which tends to hurt the poor, but no dem will ever admit to doing just that)

Of course the president defending it saying they needed to go after credit cards, yet this only affected DEBIT cards which is actually what you would prefer people to be using...another idiot statement that will be ignored.

10/5/2011 10:20:06 AM

2 ridiculous quotes I saw in the CO article:

Quote :

""Your decision to charge a new monthly debit fee is an overt attempt to make even more profit off the backs of your customers," Durbin wrote."

So it's not ok to try and make money from your customers. I thought thats what businesses do. At&t charges me $10 a month for text messaging in an attempt to "make even more profit from me." In 2010 their CEO made 1.5MM in salary and got a 5.9MM cash bonus plus equity and perks. The company had net income of 20BN. Shouldn't Dick Durbin be outraged since he's now deciding how much profit is too much profit?

Quote :

""My hope is, that you're going to see a bunch of the banks, who say to themselves, 'You know what? This is actually not good business practice,' " Obama said."

And what the hell does Obama know about what may or may not be a good business decision for a private corporation.

10/5/2011 10:49:44 AM

BofA was run by greedy uncaring smucks before the rate cap took effect, yet they waited until now to impose the fee.

10/5/2011 11:40:10 AM

"Obama is helping the banks, fuck the banks and fuck Obama!!!"

"Obama is hurting the banks, hurray for banks and fuck Obama!!!"

Seriously, it's so fucking transparent that it's honestly insulting that you think the rest of us don't notice. Maybe its racism, maybe it's ideology, or maybe it's just plain old stupidity but either way the only consistent view any of you people have is "no matter what, anything Obama does is automatically bad".

10/5/2011 3:32:26 PM

No one here is inconsistent except for you. The anti-Obama's are in favor of the American people, almost all of which are taxpayers and consumers. Bailing out the banks harmed taxpayers. Passing regulations to harm the banks is harming consumers.

Seriously, you were in favor of helping the banks because banks were good, now you are in favor of hurting the banks because banks are evil. Tell me again who is being inconsistent.

10/5/2011 4:22:49 PM

Quote :

"either way the only consistent view any of you people have is "no matter what, anything Obama does is automatically bad". "

This is called partisan hackery. I have reached the conclusion that no matter what Obama does good or bad fucktards like Palin, Limbaugh, Perry, or [insert random conservative republican here] will find some way to spin the action into a negative story.

10/5/2011 4:26:17 PM

Quote :

"Bailing out the banks harmed taxpayers"

Really? Care to explain how instead of just blabbing talking points? Keep in mind that most of the TARP money loaned to the banks has been paid back, with interest, and that the total cost to tax payers for the entire program which included more than just banks will be ~$25 billion. In exchange, we averted a global economic meltdown. Tell me how that "harmed tax payers".

Quote :

"Passing regulations to harm the banks is harming consumers. "

Passing regulations only harm banks that spent the last decade raking in unprecedented profits specifically by harming consumers. Profits that banks should never be expected to make. If the sub prime mortgage crisis showed us anything, it's that the entire business of "making money out of money" is broken and needs fixing (regulations). The current system is filled with corruption, unlawful practices, and is the cause of all our economic problems.

When was the last time you heard of a Silicon Valley company laundering money to Mexican drug cartels? Or stealing money from its customer's accounts? Or getting involved in election fraud? It simply doesn't happen. Bank of America made billions while systematically fucking over their home mortgage customers, yet it's the regulations that's harming consumers? Come on.

Banks need to go back to becoming primarily depository institutions that provide services to their customers, and the ones who provide the best service should be the ones who make the most money. Not the ones who are the best at working their books, hiding their illegal activities, and playing the American consumer for fools.

[Edited on October 5, 2011 at 5:08 PM. Reason : :]

10/5/2011 5:03:16 PM

Quote :

"Banks need to go back to becoming primarily depository institutions that provide services to their customers, and the ones who provide the best service should be the ones who make the most money. Not the ones who are the best at working their books, hiding their illegal activities, and playing the American consumer for fools. "

Here Here

10/5/2011 5:08:00 PM

This was my problem with all of this... I always thought the transaction fees that banks were charging merchants were far too high based on the fact that for the vast majority of transactions, the customer is spending money they actually have in their bank account. The bank, except in the cases of fraud, doesnt have to worry about the customer 'not' having the money. The money is in their account, and gets deducted as soon as they swipe. Regular credit cards dont have this luxury. Their clients can go on a spending binge one month, then decide not to pay, and there is little the credit card company can do.

And in retrospect, there is really zero benefit for using a debit card over a credit card. I am not sure why I ever used a debit card instead of a credit card. The one thing debit cards did is make sure that practically ever vendor has to accept cards these days. This is their legacy. But after using AMEX and Mastercard this past 8 months for all my purchases, I don't think I'll ever go back. Far better protections and far better perks than a bank gives.

10/6/2011 10:01:25 AM

Quote :

"When was the last time you heard of a Silicon Valley company laundering money to Mexican drug cartels? Or stealing money from its customer's accounts? Or getting involved in election fraud? It simply doesn't happen. Bank of America made billions while systematically fucking over their home mortgage customers, yet it's the regulations that's harming consumers? Come on."

Interesting example you use. Silicon Valley suffers from almost no regulation whatsoever beyond contracts enforcement. Meanwhile, finance is the most regulated industry we have after healthcare. Does this correlation mean nothing to you?

Quote :

"In exchange, we averted a global economic meltdown. Tell me how that "harmed tax payers". "

Easy. it didn't avert a global economic meltdown. It caused it. We had a financial meltdown in 1987 with no bailouts for anyone and didn't even have a recession. This time we spend hundreds of billions nationalizing the mortgage industry (fannie & freddie) and are now coming up on the fourth year of recession.

Quote :

"Profits that banks should never be expected to make."

What this statement also implies is that banks should never be expected to suffer from losses. As much of the current problems stem from banks being insufficiently concerned about losses, your proposal would just make things even worse.

10/6/2011 10:30:12 AM

Quote :

"And in retrospect, there is really zero benefit for using a debit card over a credit card. I am not sure why I ever used a debit card instead of a credit card."

Cash back....

10/6/2011 11:22:28 AM

Quote :

"Interesting example you use. Silicon Valley suffers from almost no regulation whatsoever beyond contracts enforcement. Meanwhile, finance is the most regulated industry we have after healthcare. Does this correlation mean nothing to you? "

Sounds like we need to start heavily regulating the tech industry to bring them in line.

10/6/2011 11:24:11 AM

Ok, if the argument here is that less regulation of financial services would have avoided all of this, then I have no idea why I'm even debating you two. You're obviously living in some kind of fantasy world. If you're interested in the real world, go research what happen in Iceland between 2001 and 2008, and then tell me again that financial services would be better off with less regulation. Fucking lunatics.

10/6/2011 11:34:22 AM

You mean when they let the banks fail, and then got out of recession while the rest of the world was still struggling?

You're living in a fucking fantasy land if you think the financial sector was anything close to "unregulated" in the past century.

[Edited on October 6, 2011 at 11:36 AM. Reason : ]

10/6/2011 11:35:51 AM

No, I mean when a country with a population smaller than Raleigh deregulated their banking industry and ran up $100 billion of debt. And they didn't "let their banks fail". The government took them over, basically the same thing we did except they took the extra step of firing all their politician, replacing them with women, and re-instituting regulations that our current Congress would never allow.

Quote :

"You're living in a fucking fantasy land if you think the financial sector was anything close to "unregulated" in the past century"

Oh really? I imagine I'm about to hear another diatribe about how the Fed controls everything behind the scenes. Save it, I've already heard your uninformed dribble too many times.

[Edited on October 6, 2011 at 11:41 AM. Reason : :]

10/6/2011 11:40:02 AM

It's not uninformed, you idiot. Do some fucking reading. It doesn't seem like you know what the Federal Reserve does at all.

[Edited on October 6, 2011 at 11:48 AM. Reason : ]

10/6/2011 11:48:15 AM

Quote :

"Interesting example you use. Silicon Valley suffers from almost no regulation whatsoever beyond contracts enforcement. Meanwhile, finance is the most regulated industry we have after healthcare. Does this correlation mean nothing to you? "

The only correlation I see is that industry regulation doesn't seem to affect industry profits since healthcare and finance are both doing atleast as well as Silicon Valley.

10/6/2011 11:53:51 AM

Doing well for who? In the case of healthcare, the insurance companies are getting richer, and prices are going up for consumers. That's not good for the overall economy.

10/6/2011 11:55:45 AM

why all of the nuance? Profit is the best measure of a companies worth to society

10/6/2011 12:01:37 PM

No, it's not, and no one has said that. Profit (and the profit motive) is both necessary and good, but it says nothing about the sustainability or impact of an enterprise.

10/6/2011 12:07:05 PM

Quote :

"The social responsibility of business is to increase its profits -Milton Friedman"

[Edited on October 6, 2011 at 12:15 PM. Reason : isnt sustainability a socialist codeword?]

10/6/2011 12:13:06 PM

Milton Friedman said a lot of dumb things. And, no, socialists don't have the sustainability market cornered, though they might have a monopoly on "impossibility".

10/6/2011 12:18:17 PM

are you really gonna throw THE Milton Friedman under the bus like that?

If profit isn't the best measure of a companies worth to society, then how can we expect a free market (where profit is always maximized) to ever achieve an optimal outcome

10/6/2011 12:28:46 PM

Quote :

"go research what happen in Iceland between 2001 and 2008, and then tell me again that financial services would be better off with less regulation. Fucking lunatics."

What shit is this? Iceland regulated their banking industry too. You admit it yourself: "And they didn't "let their banks fail". The government took them over" as the law said they would. Iceland, like America, had a government policy of privatizing profits and socializing losses through guaranteed bailouts. It is this regulation that led Iceland banks (and American banks) to purposefully invest in risky ventures. It is clearly what regulation they had: a policy of government bailouts. What regulation do you think was missing which would have offset this perverse policy?

Quote :

"The only correlation I see is that industry regulation doesn't seem to affect industry profits since healthcare and finance are both doing atleast as well as Silicon Valley."

I see that correlation too. If you had asked what impact regulation would have on profits I would say regulation of an industry drives up profits. The assertion was that regulation harms consumers by driving up fees, as has happened, not that the banks make less money. Remember my old position: I have never known of any event where an industry was regulated against its will. I strongly believe the banking industry as a whole was in favor of the Dodd-Frank bill, for the very reason you identify: regulation increases profits, so industry is always in favor of regulation.

Quote :

"If profit isn't the best measure of a companies worth to society"

The best measure of a companies worth is consumer surplus. It is the case that consumer surplus is almost always correlated profits. As such, it is reasonable to say profit is the best measure of a companies worth to society, accepting that there are glaring exceptions, such as a business receiving government subsidies whose profits are entirely unrelated to consumer surplus.

[Edited on October 6, 2011 at 12:53 PM. Reason : .,.]

10/6/2011 12:51:05 PM

Quote :

"If you had asked what impact regulation would have on profits I would say regulation of an industry drives up profits . . . . regulation increases profits, so industry is always in favor of regulation. "

What happened to the "... regulations are onerous, backbraking, job killers blah blah blah"


and while industry is in favor of regulation some of the time, its certainly not true ALL of the time, business lobbies both for and against regulation

Quote :

"I have never known of any event where an industry was regulated against its will"

what about tobacco companies?

10/6/2011 1:12:47 PM

Quote :

"Cash back...."

that is offered by numerous cards not linked to your bank account.

10/6/2011 1:27:15 PM

Quote :

"What shit is this? Iceland regulated their banking industry too. You admit it yourself: "And they didn't "let their banks fail". The government took them over" as the law said they would. Iceland, like America, had a government policy of privatizing profits and socializing losses through guaranteed bailouts. It is this regulation that led Iceland banks (and American banks) to purposefully invest in risky ventures. It is clearly what regulation they had: a policy of government bailouts. What regulation do you think was missing which would have offset this perverse policy? "

Buddy, you've got it backwards. Before 2001, Iceland's banking industry was basically owned and controlled by their government, and there were strict regulations on lending and capital investment. After 2001, the banking industry was privatized and their new bosses were allowed to do basically whatever they wanted. Before they knew it, these new privates banks ran up debt about 10x the GDP of the entire nation of 300,000. Now, their largest banks are back under control of the government and things are improving.

10/6/2011 1:34:57 PM

Quote :

"what about tobacco companies?"

With the possible exception of smoking bans at the city level, the tobacco companies were regulated entirely at their own insistence. The agreement was in exchange for a cash payment from the companies, they get to create a government enforced cartel which has driven profits (through high prices) to record highs even while cigarette taxes have increased and sales have plummeted. The advertising ban has also driven up profits.

Quote :

"After 2001, the banking industry was privatized and their new bosses were allowed to do basically whatever they wanted."

Exactly. They were allowed to do whatever they wanted with taxpayer dollars. Had they been gambling with their own money they would have been more cautious. Making them a government run bank doesn't change the equation, it would still be gambling with taxpayer dollars.

Quote :

"Now, their largest banks are back under control of the government and things are improving."

In the short term. In the long term their banks still have a blanket bailout guarantee from their government going forward. As such, it is just a matter of time until they borrow too much and find themselves insolvent, yet again bankrupting the government and plunging the country into chaos.

10/6/2011 2:52:05 PM

Quote :

"So please tell me how a $5 charge is "necessary" to provide the funding for the infrastructure that allows such transactions to begin with."

Do you really think that the infrastructure to enable debit card usage is free? All the computer programs written to make it work didn't appear out of thin air. All the servers these programs run on aren't free and magical. All the network bills required to support this service aren't free, either. You do realize how it was funded before, right? And you do realize that this very funding mechanism was essentially destroyed by Durbin's bill, right? And you are then surprised when a bank tries to continue to fund it?\

Quote :

"however, consumers don't appreciate a direct fee. when it was hidden (via charging the merchant) consumers were ignorant to the fee. however, I highly doubt we see a decrease in product prices due to the lower transaction fee, so in the end, this law does nothing but increase costs for BOA customers."

bingo. you should redirect your outrage towards the merchants like walmart and target who lobbied Congress to change an otherwise perfectly functional system in order to line their own pockets at the expense of previous agreements and contracts they made with the banks. Who is really the bad guy here? Right, the ones who said "fuck a contract, I'll get Congress to help me"

10/7/2011 8:37:14 PM

Quote :

"How is that rate -- the "interchange fee" -- set? Until this year, it was set by market forces. Visa and Mastercard offer stores a service that facilitates sales and brings in more business. In return, they demand a cut of the sale. Walmart and Joe's Corner Store aren't required to accept debit cards or credit cards, but they do, which means that they decided the price was worth it. Retailers, of course, wish the card issuers and processors would provide this service for free. Businessmen are always looking for a better deal. The businessmen in this case decided to employ regulatory robbery to get their way. Led by Walmart and the Retail Industry Leaders Association, retailers pushed for a federal cap on interchange fees. Debit-card users don't have the lobbying clout of Walmart and the retail industry. It's the standard tale of government intervention in the economy: The guy with the best lobbyists wins, and the little guy -- this time, the consumer -- loses." "

http://campaign2012.washingtonexaminer.com/article/thank-wal-mart-your-new-bank-card-fee

10/14/2011 11:42:47 AM

********************************************************************
Bank of America just reported highest profits in years. BofA also suckered the FDIC into insuring $75 Trillion in additional toxic assets this week.

Keep up the good work, protesters. It's really working.

*******************************************************************

[Edited on October 20, 2011 at 12:26 PM. Reason : .]

10/20/2011 12:25:04 PM

Nothing to see here, folks.

10/20/2011 12:34:01 PM

^^ their earnings sucked actually.

And yes. They are going to use the $1 trillion in deposits to cushion the blow on their losses.

If you have money in that bank and you lose it, you deserve it. You'd have to be a complete idiot not to see what they just did.

10/25/2011 2:00:00 AM

Quote :

"BofA also suckered the FDIC into insuring $75 Trillion in additional toxic assets this week."

That is sad. Investment banks should be kept separate from commercial banks for this very reason. They just shifted all of that risk to the taxpayers.

10/25/2011 7:53:24 AM

Quote :

"That is sad. Investment banks should be kept separate from commercial banks for this very reason. They just shifted all of that risk to the taxpayers."

You mean a law should be passed by the government to stop the government from forcing a commercial bank to acquire an investment bank against their will? Really? How about we just pass a law to stop the government from imposing mergers on people?

10/25/2011 11:04:53 AM

^ I can get behind that.

10/25/2011 11:19:51 AM

$5 fee goes the way of Qwikster.

11/1/2011 2:03:51 PM

the people running some of these operations must be braindead....alteast the other banks were smart enough to quietly test the fees in small markets to confirm the backlash w/o all the bad pub.

11/1/2011 2:40:42 PM

They don't care about customers. They care about congress. The $5 fee was an attempt to create popular support for a repeal of the Dodd-Frank act. They knew exactly what they were doing, it just didn't work out.

[Edited on November 1, 2011 at 6:30 PM. Reason : In other words, the bad publicity was the goal.]

11/1/2011 6:29:25 PM

I dunno...while that certainly seems plausible, the level of charity involved is hard to fathom. Is it really your suggestion that Bank of America chose to shoot themselves in the foot for the benefit of all banks? The law should have no impact on Bank of America's profits, as their competitors face the same losses and prices will adjust. However, if they move alone to piss off customers in hopes of influencing Congress, even if they win they have pissed off customers and will lose market-share.

11/1/2011 11:28:58 PM

I thought that if corporations wanted something they just contributed to campaigns and lobbied with million dollar handshakes on both sides of the political fence. They don't need the public to apply any pressure because the representatives stopped listening to the public a long time ago.

[Edited on November 2, 2011 at 8:55 AM. Reason : -]

11/2/2011 8:55:13 AM

As this regulation passed, you can rest assured the corporations were entirely in favor of it. The question is, which corporations. In this case, Walmart was bigger and more powerful in Washington than the banks.

11/2/2011 11:21:36 PM

Some people are clever. Walmart orchestrated this entire thing, but not just for the obvious reason of lower debit-card fees for itself. No, it is also cornering the banking market for itself. As non-retailer banks are losing profitability and thus customers, Walmart's unregulated non-bank banking services are flourishing.

http://finance.yahoo.com/news/High-Bank-Fees-Give-WalMart-a-nytimes-3177514040.html?x=0

It it wasn't so sad, it'd almost be morbidly entertaining to watch big business use the democrat run government to screw the poor.

11/8/2011 10:53:41 PM

gotta hand it to em, it's a smart approach....but all its gonna take is for one large scale money laundering (or turrist funding/both) case to lead back to them and the gov is gonna do what it does best....choking, knee jerk regulation and that's that.

11/9/2011 9:38:31 AM

$ 5.14 I wounder if they are gonna pass Timmy G's new super stress test? Extra points for passing the super test and going out of biz in the same month.

11/23/2011 9:29:00 PM

Too Patriotic of a Business Name to Fail

11/24/2011 1:09:44 AM