Bank of America -NT

[JohnH]

Too Big To Fail...Still More Wisdom from Simon & James

This discussion has taken lots of twists and turns, but it seems the overarching issue is the problem of behemoth banks which have insulated themselves from normal market forces. The way they accomplish this is by becoming "Too Big To Fail" by utilizing "Regulatory Capture" to remove obstacles to their growth. Allowing them to fail just becomes too painful to the economy. But there is another solution, as James Kwak and Simon Johnson explain...

http://baselinescenario.com/2011/11/17/why-not-break-up-citigroup/

[Gary2]

I'm a pay-as-you-go type but I do it by charging everything I can on my credit cards, then paying the bill in-full on time so I avoid writing a lot of checks or having a lot of debit card charges to keep up with. The only way I use a debit card is at an ATM.

Ditto. Credit cards have historically had better consumer protection on purchases and false charges. I'd rather be in a position of refusing to pay bogus charges than trying to recover funds swiped from my account using a stolen debit card.

[taxxcpa]

Bank of America and the other greedy big banking institutions found out the hard way.


Debit card customers are pay-as-you-go type people, who prefer NOT using credit. These folks carry significant depositor balances in their bank accounts, and when they "walk" the bank really feels the hurt if they do it in large numbers.

I'm a pay-as-you-go type but I do it by charging everything I can on my credit cards, then paying the bill in-full on time so I avoid writing a lot of checks or having a lot of debit card charges to keep up with. The only way I use a debit card is at an ATM.

[Nashville]

Out of Touch

Bank of America and the other greedy big banking institutions found out the hard way.

I believe in large institutions those who accede to the top are plain and simple OUT OF TOUCH with what's going on down in the bowels of the organization.

In this case, the banks simply thought they could bang the cardholders with yet another source of revenue. People who deal with reality actually know that a debit card customer is different from a credit card customer.

Most credit card customers depend on their plastic for cash flow, and are so deeply in debt that they must live on credit in order to deal with their debt service requirements. They can't just pick up and "walk away" from their credit card, even if they have multiple cards with multiple banks. For these people, fortunately, many of them are seeing the economic folly associated with this and are paying down their debt in order to eventually bail out.

Debit card customers are pay-as-you-go type people, who prefer NOT using credit. These folks carry significant depositor balances in their bank accounts, and when they "walk" the bank really feels the hurt if they do it in large numbers.

For my part in it, I was glad to see the impact of thousands of people leaving these large institutions. The well-advertised notion that a large company uses its vast resources to serve its customers better is a myth. Their "vast resources" carry with them the seeds of inefficiency, unaccountability, and plenty of smokescreens to hide their misintentions.

[Burke]

I must be missing something. Most people I know who use debit cards use them in lieu of writing checks. Before there were debit cards, did most people object to fees on checking accounts which did not have certain balances? Banks make no money on checking accounts since they are demand deposits. Isn't this the same thing? PS: I have no debit card, but I do have an ATM card to obtain cash from time to time (from my own accounts.) Enlighten me. I can handle it.

And there is a move afoot to survey people on the street about where they bank. If not local, why not? This may gain momentum. All the credit unions in my town and the local hometown banks say their new accounts are up huge percentages for the month of October.

[JohnH]

I thought about this thread when I ran across the attached article. I suspect that even though BOA has now rescinded the $5/month fee, they really don't care whether they lose certain customers. We will see as time goes on.

http://finance.yahoo.com/banking-budgeting/article/113748/credit-unions-poach-clients-wsj?mod=bb-budgeting

The key sentence is at the middle of the article:
"Executives at large banks have shown few signs of worry that depositors might walk out the door. One reason: People who gravitate to credit unions tend to be unprofitable for giant banks..."

[Nashville]

What's Wrong With

I've got a brilliant idea how the banks can replace the profits that they made by ripping people off on plastic cards:

Make interest bearing loans and collect them!!!

God forbid! What a novel idea! None of their geniuses have come up with idea in at least 40 years!

[BHoffman]

Perhaps those "too big to fail" bankers are barricaded behind their desks, reduced to shooting paper clips from rubber band slingshots at federal regulators after expending their drone staplers and hellfire letter openers against the "occupy wall street" cannon fodder sent to soften defenses and cut off supply lines to the expresso machine in the cafeteria.

Prelimary negotiations are said to be underway:

http://www.youtube.com/watch?v=NPRlHwwVIug&feature=related

[JohnH]

It is puzzling to watch how terribly they are handling their web site problems from a PR standpoint. They are in their 3rd or 4th business day of slow service/no service. They continue to say they are not experiencing a "denial of service" attack, and at the same time they say they aren't experiencing any unusually high customer activity.

Most of the articles I've read by tech types say that they can easily handle very high customer volume, so it's clear there is some sort of denial of service attack taking place. Usually, when a company admits that, the attack eventually subsides as the people carrying it out get their attention, lose interest, and turn their sights somewhere else.

So why won't BOA admit the obvious and move on? Is it arrogance or something more sinister?

[veritas]

I believe you are correct

I had someone today say that the Durbin bill was prompted by lobbyists from WalMart and other large retailers who ultimately will save $16 billion in bank fees. This sounds easy to believe except the retailers' fee is a negotiated percentage, which would have been a tiny percentage indeed for the WalMarts of the world. On the other hand, members of Congress almost NEVER legislate against the powerful banking lobby unless prompted by an equal or greater special interest. I doubt Mr. Durbin had the "Mom and Pop" grocery store in mind when he introduced his legislation.

So who's the villain? Bank of America with excalpatory fees? WalMart by having favorable legislation handed their way? I guess we're getting further and further away from taxes, and I am the guilty party. The sad truth is as tax preparers we all get sucked into economic issues. The best I can say for myself is I have at least avoided partisan politics.

this is a result of Walmart lobbyists.

So who is the villain? Certainly not Walmart, they are looking to increase their earnings and keep prices low. It's not the banks, they are in business to make money and the Durbin bill cut billions from their bottom line.

So who is the villain?

By the way BoFa's website is still not functoning correctly today.

[JohnH]

"not every bank is trying to pay for the Countrywide acquisition"

I like this.

James Kwak again:

http://baselinescenario.com/2011/10/04/bad-old-day/#entry

[Snaggletooth]

Who's the Villain?

With respect to the announcement of charging customers $60/year to use a debit card, how on earth do they expect to keep these customers?

I had someone today say that the Durbin bill was prompted by lobbyists from WalMart and other large retailers who ultimately will save $16 billion in bank fees. This sounds easy to believe except the retailers' fee is a negotiated percentage, which would have been a tiny percentage indeed for the WalMarts of the world. On the other hand, members of Congress almost NEVER legislate against the powerful banking lobby unless prompted by an equal or greater special interest. I doubt Mr. Durbin had the "Mom and Pop" grocery store in mind when he introduced his legislation.

So who's the villain? Bank of America with excalpatory fees? WalMart by having favorable legislation handed their way? I guess we're getting further and further away from taxes, and I am the guilty party. The sad truth is as tax preparers we all get sucked into economic issues. The best I can say for myself is I have at least avoided partisan politics.

[oceanlovin'ea]

My daughter has a friend that works for Wells Fargo. She is so stressed out with her job. She told my daughter that they can't even order checks for a customer without filling out a page long inquiry about the customer's financial situation.When it is filled out, the customer service person takes it to their manager and he will give permission to order the checks or whatever the customer wants. If the customer complains or refuses, they are supposed to tell the customer that they can't help them at this time. If they want to close the account, let them do so. She said she had one manager yelling at a customer in her office.
She said they are only interested in "new" items. Keeping money isn't important. It is selling them some new service.
They have to make 20 contacts a day in between taking care of customers. She had only made 4 one day and they told her she had to stay till she did her 20 contacts. I don't know how long she stayed but if she had another job she would be quitting, I am sure.
That is just ridiculous. So far my credit union is not charging me for things and still takes care of my needs. But a credit union usually operates under different premises than a bank.

Linda, A

[S T]

Another thought

Another thought that was posted at Forbes

http://www.forbes.com/sites/erikkain...-a-good-thing/

A post that was to give awareness to transparency, and hidden fees that the consumer rarely sees or is aware of. - like the "swipe fee" at the retailer level - which of course is just added to the cost of the product that the consumer is purchasing.

Sandy

[BHoffman]

He meant well

Read more: http://www.politico.com/news/stories...#ixzz1ZmlHT4Zh


"Over the past few days, critics of the Durbin amendment blamed the Illinois Democrat for the debit fee hike. The Chicago Tribune, in an Oct. 1 editorial, dubbed the new charge the “Durbin Fee” and blasted the senator for pushing the swipe fee change.

" 'Durbin claimed that a cut in interchange fees would translate into lower prices and better service at Walmart and 7-Eleven,” the editorial read. “Funny, but no one’s handed us a free Slurpee yet.' ”

“What we are doing is fair to try to strike some balance in an industry that has shown little or no balance,” Durbin said. “And one of the worst offenders in this is Bank of America, the largest bank in the United States.”