“No Man’s life liberty or property is safe while the legislature is in session”.

- attributed to NY State Judge Gideon Tucker

Tuesday, October 18, 2011

The BofA Witch Hunt

How confusing.

First Congress passes Dodd Frank. A law which imposes crushing and expensive regulatory burdens on consumer banking. And generally dissuades banks from doing as much consumer banking activity as they did prior to the law. A normal economic reaction when a producer experiences rises in costs of delivering a service- less is delivered.

So BofA responds by cutting 30,000 net employees and shifting focus from retail to institutional banking, because new legislation has made the former less profitable.

To make up revenues lost by new credit and debit card rules, BofA recently announced- explicitly and transparently- a new $5 fee in any month that a customer uses their debit card.

Wonderboy responded, when asked about the new fee, by attacking BofA for hidden fees.

But it's not hidden. It's a natural and expected response to Dodd Frank, and totally transparent. It's meant to drive customers back to using credit cards for small and mid-sized transactions, which will recoup some of the revenue for BofA, at no cost to customers who would pay the balance in the current period anyway.

Yet now people are protesting this explicit fee, which they have a choice not to incur. And Wonderboy blasts BofA for a fee that meets his own requirements.

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