Democrats Try to Kill Bank of America Over $5 Fee

Townhall.com ^ | October 5, 2011 | Mike Shedlock

[Kaslin]

Senator Richard Durbin of Illinois is telling Americans to "Get the heck out of that bank", right on the Senate Floor. His comments are in response to Bank of America hiking fees on debit cards.

Please consider BofA Customers Urged by Lawmakers to Quit Lender Over Debit Fee

Congressional Democrats are pushing customers to quit doing business with Bank of America Corp. and one lawmaker is looking to make it easier for them to do so as the biggest U.S. lender announced plans for new debit-card fees.

U.S. Representative Brad Miller, a North Carolina Democrat, introduced a bill today that would bar banks from imposing fees on people who close accounts, calling the proposal a response to the Charlotte, North Carolina-based firm’s plan to charge some debit customers an additional $5 a month.

“As megabanks flirt with menus of new fees, an increasing number of Americans will want to switch banks,” Miller, a member of the Financial Services Committee, said in a statement. “That is the way things work in a competitive, free market as unrepentant banks are still trying to rake in vulgar profits from their customers.”

Miller’s criticisms echoed those of Senator Richard Durbin, the Illinois Democrat who successfully pushed for legislation restricting the amount banks could collect from retailers for debit transactions. The two lawmakers spoke out after President Barack Obama questioned whether Bank of America has an “inherent right” to charge the new fee, which the company said was aimed at making up revenue lost because of the new limits on so-called interchange.

Bank of America Website Down 4th Day, "Thanks for Your Patience" Says Website

The Register reports Bank of America website disrupted for 4th day in a row

Bank of America's website continued to suffer sporadic outages on Monday, marking the fourth day that some customers have been unable to use its online services to check balances and pay bills.

"We're sorry, but some of our pages are temporarily unavailable," a note posted to the homepage for the biggest US bank read. "Thanks for your patience." The advisory, and sporadic outages, have greeted many people trying to use bankofamerica.com since Friday.

Bank of America spokeswoman Tara Burke declined to discuss the underlying cause of the outages except to say it isn't related to hacking, denial-of-service attacks, or other incidents related to security.

By not commenting, Bank of America is making matters worse.

Bank of America (BAC) Flirts With $5



Note the late-August "Buffet is Buying" spike has been taken back and then some. The $5 level is crucial. Many mutual funds cannot hold stocks whose share prices drop below $5.

Exclusive Nonsense

As an example of shoddy reporting please consider Exclusive: Buffett not worried by BofA share fall.

Billionaire investor Warren Buffett is not concerned by the sharp drop in Bank of America Corp (BAC) shares in the last couple of days, despite his $5 billion investment in the company last month, he told Reuters on Tuesday.

"We agreed to hold it for at least five years, so what I'm thinking about is where Bank of America will be in five years, and nothing in the last 24 hours or 48 hours has changed my views on that," the Berkshire Hathaway Inc (BRKa.N) chief executive told Reuters on the sidelines of Fortune magazine's Most Powerful Women Summit.

Buffett made his bet on Bank of America's survival in late August (though it closed in early September). The deal gave him preferred shares with a hefty dividend and warrants that represent 6.5 percent of Bank of America stock.

Of course Buffett is not concerned about share price of Bank of America. He owns the debt. His primary concern is the debt is paid back, not the share price. It is extremely sloppy reporting to not point this out.

Addendum:

Reader Blake writes "As a libertarian I am appalled that a senator would directly attack an individual company for pricing decisions made by that company."

Blake is correct in that stance. Senators should not make such statements on the floor of Congress.

However, the decision by Bank of America was piss poor. They misunderstood public reaction, and worse yet were not prepared for the surge in traffic. No one will remember all the other banks who followed suit. Everyone will remember Bank of America was the first to jack rates. Bank of America CEO Brian Moynihan is incompetent.

[I see my hands]

Yeah but anyone who borrowed money from them, mortgage loans, CC debt, e.g. should pay it back as they promised. Otherwise they'd be thieving scum too. And should be as despised than the BOA banksters, right?

[Buckeye McFrog]

BofA MAde the HORRIBLE mistake of telling the Sheeple WHY they imposed the fee, and named NAMES

Got that right. You don't embarrass a member of the Imperial Senate like Dick Durbin as he is taking his attaboys for standing up for the little people and not pay a price for it.

The message is being delivered loud and clear to the other banks.

[chris_bdba]

Dimocraps never think through the laws they pass for the unintended consequences....This is now known as the Dubin fee as far as I’m concerned.

[Buckeye McFrog]

I have to wonder what the top brass at BoA think being betrayed like that?

---

I can tell ya what they should be thinking.

The public is angry at banks. They want a perp walk. This country has had a populist backlash against bankers on a fairly regular cyclical basis throughout it’s history. Conditions are about ideal for it to happen again, and Durbin’s party is desperate for a campaign issue.

But I don’t think they are that smart.

[moehoward]

If one was successful in completing the loan process, with the intent to defraud, then yes, “they’d be thieving scum too”.

Again. Nothing to do with a $5 fee to spend one’s own money.

[Terry Mross]

1) BOA bought Countrywide from Dodd’s buddy.

2) BOA will probably go bankrupt so no contributions to democrats will be forthcoming so they attack BOA.

3) I hate BOA, too, but for the right reasons.

[Milton Miteybad]

Does the U. S. Government still have an equity position in BAC? In 2008, the government assisted BAC with liquidity in exchange for stock, as I recall.

If so, then Dick Durbin's ill-considered vendetta against BAC is also a broadside against the interests of the taxpayers he purports to represent, since they ponied up the money to keep BAC out of receivership three years ago.

[Constitutionalist Conservative]

Bank of America greased Dirty Turban Durbin’s palm in return for writing in the provision of the Frank/Dodd bill that allowed BoA to charge $5/month for debit card usage.

Wait... Frank/Dodd ALLOWED the $5 fee?? First I heard of that. My understanding is that F/D capped the interchange fee, and BoA imposed the debit card fee to make up for the lost revenue. In other words, there was nothing stopping them from imposing the fee before; they just never had a reason to do so until now.

[Constitutionalist Conservative]

That is the way things work in a competitive, free market

...Miller said, as he filed a bill designed to further manipulate the market.

[I Drive Too Fast]

Relax everyone. The retailers lowered their prices 1 1/2% because they benefit from the lower debit card swipe fees. WHAT!!!!!, you mean they didn't do that?

I only deal with credit unions. Haven't had a "bank" account in over 30 years.

BofA should have named names. Whenever you hear, "We're from the government and we're here to help" just know it is going to cost you bigtime.

[Darth Reardon]

Nothing to do with a $5 fee to spend one’s own money.

It's not a fee to spend one’s own money. It's a fee to use their service to do so.

[Scythian]

Boortz did an excellent monologue on this during his show yesterday ...

[Constitutionalist Conservative]

as unrepentant banks are still trying to rake in vulgar profits from their customers

Are banks limited regarding how much they can lend out? IOW, can they lend based on non-deposit assets? If so, "vulgar profits" = your mortgage.

[I see my hands]

Intent? That's irrelevant. One isn't lent money on their intention to repay. One is lent money on their signature, their sacred word. And when they don't pay back a mortgage loan, for example, they may not have intended to lower the property values of the homes in their neighborhood but that's just what they did. (And by lots more than $5/mo!!)

And no, you're just confused. The $5/mo isn't to use your own money it's for the convenience of using a debit card. Used to be the merchant paid (and had an incentive to pass along as little of the fee as possible in order to be competitive with other businesses) but federal regulations required the banks to shift the burden directly to the retail consumer. Convenience isn't free. Somebody has to pay, otherwise how would a profit be made? How would employees be paid? Or stockholders?

Nah, the $5 isn't to use your money, it's a fee for service rendered.

It's the loser, thief, deadbeats who thought they could take advantage (in the case of mortgage loans, for example) of a government rigged (CRA) system.

[CSM]

“Dimocraps never think through the laws they pass for the unintended consequences....”

As we keep sliding into marxism, I am beginning to wonder if it is really unintended.

[Mountain Troll]

It’s all my fault. Ever since I bought it, five different companies have owned and/or serviced my mortgage, and four have gone broke. If Bank of America goes down the tubes, that’ll make five. I’m thinking about painting their corporate logos on the side of my house, like kills on a fighter plane.

[Jack Hydrazine]

Durbin wrote it in.

[Constitutionalist Conservative]

Durbin wrote it in.

So, Durbin wrote in BOTH the interchange cap AND the $5 debit card fee?

I thought people were calling it the "Durbin Fee" simply because that was how the banks reacted to his interchange cap.

[Jack Hydrazine]

Nope. He wrote it into the bill. That’s why I find it so funny that he would do this for BoA and proceed to stab them in the back by telling their customers they can go eff themselves and go to other credit unions or banks if they didn’t like the fee. I’m sure the top BoA people are not happy.

With this fee and their attitude toward their customers in general and the website not working well I expect to see a percentage flee.

[moehoward]

"One is lent money on their signature, their sacred word."

So signing the contract binds the borrower to some higher conditions not included in the contract? I fail to see how either parties "sacred word" is diminished by exercising contract provisos both agreed to.

And, again. That has nothing to do with BoA debit card fee. I supposed the bottom line is, all they're doing is upping the cost of a BoA checking account. If that makes them too expensive to do business with, people will walk away. I did years ago.