The Law of Intended Consequences

Who could possibly have foreseen this?

Bank of America will become the first major bank to charge customers across the country a monthly fee to shop with their debit cards, part of a wave of changes that are eroding the low-cost model of banking that consumers have long enjoyed.

The $5 fee will debut next year for the bank’s basic checking accounts. It will apply only to debit card purchases and not to ATM withdrawals, online bill pay or mobile phone transfers. A spokeswoman said the bank is “adjusting our pricing to reflect today’s economics.”

The move is just one of the ways banks are overhauling consumers’ accounts in the wake of the financial crisis, which resulted in a regulatory overhaul for the banking system and a fundamental shift in the industry business model. Rather than charge the riskiest consumers the heftiest fees, banks are now spreading their costs more evenly among their customers.

“Spreading their costs more evenly among their customers”. We knew Obama was going to “spread the wealth around” with government. But who knew he’d make the banks do it too?

What’s going on here is that the Dodd-Frank had a provision inserted by Dick Durbin (D-Best Buy) that cut debit swipe fees from 44 to 24 cents. This shifted several billion dollars from evil banks to wonderful retailers. So the banks are pushing the costs back on us.

Well, you never know what’s going to happen when … actually we fucking did know. I said it. So did everyone else who wasn’t completely in the pocket of retailer lobbyists. But the glorious Democratic Party, defender of the little guy, made sure that retailers got a break on swipe fees at the expense of bank customers.

Comments are closed.

  1. Hal_10000 *

    That fuckwit Durbin is doubling down, blasting Bank of America for being unfair.

    Dear Senator Durbin:

    Hey fuckwit. Bank of America’s job is not to be “fair”, with “fair” defined as not charging your campaign contributors more than you think they should. BofA’s job is to make money for their investors, their creditors and their employees. They will charge us whatever the traffic will bear. I personally am taking my business elsewhere. But they are just doing what you forced them do. It’s you who acted unfairly by fixing prices.

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  2. InsipiD

    I work at a bank, and I have to answer for this new fee every day. When people cop an attitude about how they think checking accounts shouldn’t cost anything, I want to (but am not allowed to) ask them whether they think that the bank is making money off of lending the $3.12 that is in the account most of the time and whether they think it costs anything to administer the accounts. The well-moneyed can still have a free account without a card fee by carrying a large balance, but the banks are being criminalized for charging the people for checking accounts and cards from whom the bank can’t otherwise possibly make money from unless they overdraft all the time. The banks can make plenty from that, but that’s considered even more evil, even if the customer did the overdrafts on purpose. The real banking reform needs to come from how customers treat the banks. Using the debit card as a rolling credit line costs as much or more than payday loan companies charge, without the stigma, and there are plenty of people who can’t afford to do that who do it all the time and then complain about the fees.

    Any time the Dick Durbin is chiming in on an issue, you can bet I’ll be on the other side. He’s almost as bad as Schumer. Hal, if Durbin is relying on the people who are charged the card fee for donations, then he’s already in trouble.

    As for moving to a credit union, good luck. Not all of them even still have free checking, and expect them to follow the lead of the banks after a few months when they’ve had to take some of the customers who think they’re doing the bank/CU a favor. Maybe the credit union isn’t obligated to make profit, but it sure is obligated not to lose it.

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  3. Seattle Outcast

    The problem is that people see banks much as they see a utility company – essentially lumping it in with water, sewer, electricity, & natural gas, when they should be thinking of it like cable, internet, & phone service.

    The other thing is that they have absolutely no concept of how a bank operates, the risks they take, and the massive cash layouts required to maintain the constantly evolving technological infrastructure to provide all of those easy services they have come to rely on but didn’t exist 20 years ago.

    It’s just like those assholes that get bent out of shape when they find the only pay phone within 200 miles charges $5/minute.

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  4. AlexInCT

    Are you surprised by this Hal? This IS exactly what they do, and they do it every damned time. They pull a stunt like this – thinking they are sticking it to the big whatever – and when it all goes south for the consumer who ends up paying for their bullshit, they act all indignant and blame big whatever for their lack of understanding of how the real world works.

    When this provision was identified months ago many people pointed out that the banks where going to HAVE to pass the cost off to the consumer somehow or stop honoring debit cards because nobody runs anything at a loss for too long, except for government which can just choose how much more it will fleece the sitizens for, before they are out of business.

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  5. AlexInCT

    The other thing is that they have absolutely no concept of how a bank operates, the risks they take, and the massive cash layouts required to maintain the constantly evolving technological infrastructure to provide all of those easy services they have come to rely on but didn’t exist 20 years ago.

    This is by design. If people understood this stuff class warfare would lose a lot of its effectiveness.

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  6. Seattle Outcast

    Yeah, you really have to be out in the boondocks before you find one any more – those places where you drive for 5 hours and not see another vehicle. Which means the pay phone is for those clueless idiots that decided to take a road trip without checking to see if they needed to have the car serviced before they left, or an extra 5 gallon can of gas in the back, or a set of tools and fan belts.

    But there it is, in the middle of fucking nowhere, and somebody paid for it be delivered, hooked up, and maintained, and by golly, it isn’t out of the kindness of his heart. Just be glad you can use your credit card and you don’t need to dump a roll of quarters into it just to get a dial tone so you get a tow truck to come out and save your sorry ass.

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  7. InsipiD

    Pay phones are a great plot device. Notice their continued appearance in movie plots well into the ’00s, though everyone and their 6 year old daughter already had a cell. It’s basically taken them 10 extra years to figure out how to write them out of movies.

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  8. Nexus

    As I understand it(correct me if I’m wrong here) this fee only applies to B of A’s basic checking account. Those who have accounts that average over $1500 a month pay nothing. So thanks to our democratic overlords, once again the little guy gets screwed!

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  9. AlexInCT

    You got it correct. Durbin basically really screwed the little guy, while trying to screw the “evil banks”, and it’s par for the course.

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