If there was any doubt that Senate Democrats' attempts at "regulating" US banks is a thinly-veiled attempt at crippling them, Sen. Dick Durbin's latest comments about Bank of America just removed it. On the Senate floor, he suggested that BoA customers pull their money out of their accounts there, and deposit it in another bank. Rush Limbaugh mentioned this today, and how (my) NY Sen. Chuck Shumer's comments caused another "run," on a smaller bank, a while back, which resulted in it not existing anymore. BoA, however, is already a recipient of a taxpayer bailout, so it's doubtful that will happen. There is also the example of Lehman, which the government declined to "bail out." The Dems attitude toward the US banking industry seems to be like a "mob" money collector: "We don't wanna kill you, we're just gonna break your legs."
The point that stands out to me is that "taking your money out of BoA" was the answer in the first place, before Durbin decided to switch debit fees to the banks, who passed it on to their consumers. If he feels the need to tell people that, from the Senate floor, after the "Dodd-Frank" bill, and his "Durbin amendment" passed, why didn't he tell BoA's customers to get out before that law was passed? I see commercials all the time for BoA's competitors, and haven't had an account with BoA since the 1980's, when I was getting 10% on an annual CD (full disclosure). There are plenty of smaller banks that offer better terms on accounts, and none of their personal account business had anything to do with the financial crash of '07, anyway.
Why did the "Durbin amendment" cap "debit transaction" fees? Well, those fees came from "small businesses," and Sen. Dick just wanted to help them out of being screwed by the banks. He didn't think of all the constituents that he would screw over, when BoA reacted to this deprivation of revenue from retailers by transferring the fee to the debit cardholders. Of course, the customers have less political clout than small businesses, who supposedly have less clout than big businesses, like BoA...crap rolls downhill, until it gets recycled by some pol, like Dick Durbin!
The new fees that BoA and the others are imopsing are expected to bring in more revenue than their old fee structure did, even with fewer debit card customers...the only ones getting screwed here are the people who work for Bank of America. Every employee of that bank has to wake up every day wondering how long they'll have a job. They were already planning on laying off tens of thousands of workers, and this won't help.
It's more than Dick Durbin, Chris Dodd and Barney Frank's insane ideology that got this bill signed into law. President Obama buys into it, as well. He signed it, and I was as pissed as I was at Pres. Bush for signing McCain-Feingold! I don't care about party politics or ideology, I don't like legislation that has a bad outcome. He still supports it, with a weak cry that banks should "eat" the lost profit he took away from their debit card transactions...he sounds like Michael Moore, who's out selling his new book on the liberal circuit.
Michael Moore and Obama can rail against outrageous "corporate compensation," and there is a real problem with failure being rewarded. Unfortunately, this is a situation that government regulation created. Attempts to limit "monetary compensation" led to huge "benefits" and "stock option" packages, and indeed caused our whole system of "employer provided health care," as well as "corporate stock options," (which were ironically designed by the market to "regulate" executive compensation). Attempts to tax "medical benefits" led to the issuance of hundreds of waivers to "Obamacare." If Obama gets to raise "capital gains" taxes, expect waivers to be given to every company that any public pension fund invests in, which means all of the "large cap" companies, unless they're "excessive polluters," or something as politically incorrect. BoA is "too big to fail," but may be thrown under the bus, if Obama's radical side takes over!
I'm only being half sarcastic, because the economic problems we face are all to real. Maybe BoA should go under, and all of the other "big banks," as well. How else will we unwind the question of who owns the debt on all of the "underwater" mortgages, at least in the US? OK, we sold those crappy bonds to the rest of the world...so any US housing market devaluation will be a bigger "hit" than the world markets can take right now. If Obama's supporters want to "destroy capitalism," this is the best shot they'll ever get...this is what scares me; if they accept that he'll be a "one termer," will the economy repeat what happened at the end of Bush's second term? Paging George Soros, are you coming back?
Could BoA be the next "Lehman," brothers? Thanks, Senator Dick!