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How I Learned to Stop Worrying and Love Bank of America
Flopping Aces ^ | 10-06-11 | Brother Bob

Posted on 10/06/2011 11:07:35 AM PDT by Starman417

With the uproar over Bank of America introducing $5 monthly fees for the privilege of using their debit cards, there is an angle to this that everyone is missing - the law of unintended consequences. Wizbang's Jay Tea blogged about this very point over the weekend, and I want to take his point a bit further. The law of unintended consequences is going to be one of the chapters in my ongoing (which will end up being nine or ten parts) Economics for Politicians series, but this particular incident warranted its own post.

First let's step back a minute to the 1990's when ATM use took off (causing mass unemployment) and they started popping up everywhere. No longer restricted to getting money from your bank, you could get them from any bank's ATM. In fact, cash machines started popping up in places we would never expect - in bank's branches at supermarkets, in shopping malls, and convenience stores. But like everything in life, there was a cost. If you used an ATM not belonging to your bank you got charged a fee not only by the bank owning the machine, but by your bank as well. People grumbled about them and still do, but we pay those fees for the convenience. I always thought the fees were ridiculous and thought that something should be done about them by lawmakers.

In the late 1990's Investor's Business Daily was required reading a class I was taking, and I came across an article addressing this gripe regarding ATM's. The article made an excellent point that one of the reasons that ATM's popped up everywhere was because banks could charge these fees. Banks are in business to make money, and allowing them to profit from these machines is what led these machines to pop up like daisies in so many then uncommon locations. The article also made an excellent point regarding anyone who still felt cheated by these fees - you could still use your bank's ATM at no charge 24/7. Or for that matter, look at what options were available before the rise of the ATM. I came of age where my working career began just as ATM's were emerging. I still remember the lines at the bank on Thursdays and Fridays to deposit paychecks and to withdraw money before the bank closed for the weekend. Or if your bank had weekend hours, it was a short window on Saturday mornings that meant more long lines. The ATM changed all of that. Now you had 24/7 access to your money, and the clincher for me was the fact that nothing that was available to you before was taken away. You still could see your neighborhood teller during business hours (with much shorter lines), and now you also had access to a 24/7 machine at no charge to you and access to vastly more if you were willing to pay a fee. Ban the ATM fees? Guess what will start disappearing in no time flat.

So now the Durbin Amendment of the Dodd-Frank bill now has banks making consumers pay to use their debit card networks because they are no longer allowed to cover the cost with merchant fees? Guess who you should be blaming.

(Excerpt)

TOPICS: Business/Economy; Government; Politics
KEYWORDS: bank; durbin; economy; fee

1 posted on 10/06/2011 11:07:41 AM PDT by Starman417
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To: Starman417
Sent to Durbin via his website yesterday:

Dear Sir:

I am a customer of Bank of America. In a recent poll, 70% of the customers of BoA claimed they will leave the bank if the $5 per month fee were to be implemented. You encouraged me to leave BoA when you took the floor of the Senate in your recent errant statements. I am NOT one of those customers who will leave the bank. But I am looking to you to make this right.

Please note:

I will give you the benefit of the doubt. Maybe you were not aware of the unintended consequences of your amendment which led to these fees. If that is the case, you can reverse or correct this error by changing the law. Please do so expeditiously.

If you were aware of the impending fees, and you wanted BoA to lose customers or somehow punish this bank, that is shameful, and you owe BoA and its customers an apology.

So, which will it be? Will you correct your mistake, or will you stick to your opinion that your amendment was helpful? If you think the amendment was helpful, which will lead to BoA going out of business, it will also punish small businesses who may lay off employees while trying to calculate razor thin profit margins due to more bank fees.

Please keep in mind that Congress often does not think through the unintended consequences, and that the American people will always react to poor decisions by Congress.

Please make this right.


2 posted on 10/06/2011 11:19:57 AM PDT by SERKIT ("Blazing Saddles" explains it all......)
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To: Starman417

Thanks little Dick, Ya....

3 posted on 10/06/2011 11:20:30 AM PDT by mk2000
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To: Starman417

I started using my credit union’s ATM card back in the early 80’s. I loved it. I was exstatic when grocery stores started taking them. I have paid fees to use the card less than ten times in my life. If I REALLY need some dough, I buy a pack of gum at a grocery store and take out some cash. Costco and Sams Club do it too. It is especially necessary now that I have moved over a thousand miles from the nearest cash machine available from my credit union.

Hasn’t impacted me a bit.

4 posted on 10/06/2011 11:21:20 AM PDT by cuban leaf (Were doomed! Details at eleven.)
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To: Starman417

Is this a drinking game?

5 posted on 10/06/2011 11:22:31 AM PDT by Kartographer (".. we mutually pledge to each other our lives, our fortunes, and our sacred honor.")
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To: Starman417

Been with BoA for dozen years and very happy with their service. The staff is the friendliest of any bank I have dealt with in 40 years. We use the debit card only at 1 place we frequent since they do not take credit card. So, no biggie, will just pay cash at that store.

6 posted on 10/06/2011 11:39:26 AM PDT by federal__reserve
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To: Starman417

Excellent article. And I’m no fan of BOA, but this shows the “bigger picture.”

7 posted on 10/06/2011 11:45:37 AM PDT by RockinRight (If everyone wants to ride in the wagon, then who is pulling it?)
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To: RockinRight
No one to my recollection emphasizes the convenience to
the retailer who accepts a debit card. He is completely
relieved of dealing with cash. Someone buys a paper and
gives him a 20 dollar bill. The bank does all the book-
keeping for the merchant. So be fair. Everybody is
raising prices as inflation,(brought on by Obama's
outrageous spending) is rampant. Have you gone to a
movie lately? $15/yr seems to be a fair charge for a
debit card. They are CONVENIENT aren't they. The
retailer needs to bump his share from the Durbin gift.

8 posted on 10/06/2011 1:03:04 PM PDT by cliff630
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