Scenario: A group of mad scientists forcibly injects some patients with a bad strain of the flu they have created in the lab. Looking for some relief, the patients go to the pharmacy, where they cough on some of the other pharmacy customers, who then catch the flu.
Then, the mad scientists (their names are Obama, Dodd, Frank and Durbin) who created the flu (debit fee hikes caused by the Dodd-Frank-Durban price controls on debit swipes) have the audacity to blame one of the patients (Bank of America) for going to the pharmacy (the market) for relief, and thus passing the flu on to others (bank customers).
But that’s exactly what these mad scientists have done, and are doing:
It is difficult to think of family-friendly nouns and adjectives to describe these politicians and their actions in blaming the victims of their own policies. And some of these same politicians are offended to hear that their regulatory assaults are keeping the private sector from creating any jobs.
Politico’s David Mark asks, “Are BOA customers ‘mistreated’ by the fees, as President Obama suggested? Or are the fees the inevitable result of the Dodd-Frank financial overhaul bill?”
AFP’s Phil Kerpen responds:
This was the 100 percent foreseeable and expected consequence of imposing price controls on swipe fees via the Durbin amendment to Dodd-Frank, which the Senate failed in July to even slow down and study when it failed to pass the Tester-Toomey amendment. It is impossible to make something cheaper by imposing draconian price controls without shifting costs and causing other adverse consequences.
At the time of the July vote, I wrote a column with the headline “If you like free checking, this is a vote to watch.” Unfortunately not enough people did watch; 12 Republicans voted to impose price controls, and now we are beginning to see the consequences. Now some of the politicians most responsible for this mess – chiefly Dick Durbin – are trying to dodge responsibility by bashing banks. It’s shameful.
For more on the debit card price controls and the other disasters in Dodd-Frank, see chapter 6 of my new book “Democracy Denied”.
I’m writing to let you know that as a customer, I won’t tolerate extra fees that do nothing to serve consumers. Bank of America’s new $5 monthly fee just for using a debit card is nothing but a way to pad corporate profits. If you insist on charging fees like these, then I will simply start looking elsewhere for my banking services.
After pointing out to Arizona PIRG that the debit fee hike is actually the result of the Dodd-Frank legislation, I told them the following:
I understand that PIRG’s campaign may help consumers and activists to pressure BofA to lower its debit fee (which may then cause competitors to lower theirs). But if these banks are raising the fees mainly in order to pass along costs imposed on the whole industry by Dodd-Frank, there will be a finite limit to how much they can really lower their fees. And while no one should ever ask me to defend the profits of bailed-out banks, last I checked, BofA was not doing all that great, profit-wise:
So much for padding corporate “profits.” In fact, the last time I talked to an investment guy about the banking sector, he suggested I stay clear of the whole industry. He named one firm he thought was probably safe (it wasn’t B of A), but he didn’t seem excited about the ongoing profitability of the sector.
For Liberty, Tom
Americans for Prosperity