Updated: October 5, 2011
So Bank of America is raising their debit card usage fees and the country is outraged. Do not point the finger only at Bank of America! Washington deserves at least 50% of the blame and any news outlet that does not give you the whole story should be called out.
So Bank of America is raising their debit card usage fees and the country is outraged. Do not point the finger only at Bank of America! Washington deserves at least 50% of the blame and any news outlet that does not give you the whole story should be called out.
After Bank of America announced a $5 monthly debit card usage fee earlier this week, the usual drumbeat bashing of BIG BANKS began. What happened to intellectual honesty and curiosity? Does anyone care about the truth?
The Left is brilliant in their perpetuation of the bashing of BIG business in general and BIG banks specifically. After all, their goal is more government control of our lives. Capitalism is the largest impediment to gaining that control.
If you want to engage in an honest debate about this topic, you must ask the obvious question: "What the hell do you expect a business to do when the government shaves billions in revenue off their books?" If you care to understand the truth, please research the Durbin Amendment in the Dodd-Frank financial reform law. I implore you!
The banks are NOT non-profit ventures. They have shareholders for whom they have a fiduciary duty to maximize profits. Look at the debit card business in particular. Inside the BIG, BAD banks are debit card lines of business which, by the stroke of a pen, last year saw a huge chunk of their revenue abolished. What are those business leaders supposed to do? They MUST make up the revenue somewhere. Usage fees is one place to do that.
Financial Crisis History Lesson:
When the financial crisis hit, the Left and many on the Right blamed “the BIG bad banks” for causing it. Then many of these same financial institutions received government bailouts. Some of them did NOT want to take the money but were coerced to do so "for the good of the country". That is only part of the story. Again, I implore you to research the sub prime mortgage fiasco, which dates back several decades and several administrations.
Below are a few places to start to uncover the governmental pressure on the banks to make sub prime loans:
When the financial crisis hit, the Left and many on the Right blamed “the BIG bad banks” for causing it. Then many of these same financial institutions received government bailouts. Some of them did NOT want to take the money but were coerced to do so "for the good of the country". That is only part of the story. Again, I implore you to research the sub prime mortgage fiasco, which dates back several decades and several administrations.
Below are a few places to start to uncover the governmental pressure on the banks to make sub prime loans:
- The Community Reinvestment Act of 1977.
- Janet Reno's Justice Department constantly threatened to sue banks if they did not make loans to "under-served areas", to "underprivileged" borrowers or to borrowers "without the means of the wealthy".
- Fannie Mae and Freddie Mac.
- Barnie Frank - As Chairman of the House Financial Services Committee, he blatantly lied about the "fundamentally sound" institutions.
- Bush tried to fix Fannie Mae and Freddie Mac (see link above).
- ACORN repeatedly used coercive acts to pressure the banks to make bad loans.
The Lessons:
#1 - Every government regulation has a downstream impact. Durbin (who is one of the more despicable members of Congress once comparing our troops serving at Guantanamo Bay to Nazis, Soviet gulags and Pol Pot) knew the banks were going to be forced to raise fees to cover the revenue short fall. This would give the Left one more opportunity to bash BIG business and BIG banks.
On October 4, DICK Durbin displayed just how audacious his hypocrisy is by slamming Bank of America for taking actions to make them whole from his amendment. Dick said. "When Bank of America decides they want to nail their loyal customers...they should be held accountable."
#2 – Who will be hurt more by a $5 debit card fee – the rich or the poor? The most ironic part of this story is how the Democrats in Congress, who claim to be the party of the poor and downtrodden, constantly punish their own constituents via more and more government regulations and taxes on the private sector. These government fiats, whether they are gas and cigarette taxes or financial limitations on debit card transaction fees, always hit the poor hardest. A $1 per pack tax on cigarettes or a $0.10 per gallon gas tax or a $5 monthly charge for using a debit card hits the guy making $10 an hour harder than the guy making $100,000 a year.
#3 – Never take any news outlet at their word. Do your own research!
#4 - We need to elect people who will examine the downstream impacts of legislation.
#3 – Never take any news outlet at their word. Do your own research!
#4 - We need to elect people who will examine the downstream impacts of legislation.
#5 – We need to elect people who are looking for solutions, not quick fixes and sound bites.
Click here for a great Forbes.com article about this issue.
