With the implementation of the Dodd-Frank Act coming October 1—capping transaction fee costs, banks are panicking. Obama’s recent attempts at curbing predatory credit card practices and Wall Street swindlers may be futile. With low-interest rates, low demands for loans, Bank of America’s acquisition of Lehman Brothers’ and Merrill Lynch’s toxic assets and still a slow economy, US banks are increasingly looking for creative ways to cover their costs.
Bank of America (and other banks are working hard to follow their lead) has decided to tax the American consumer yet again because we all know that the consumer can afford it. With reports of Bank of America paying $2.8 billion to Freddie Mac and Fannie Mae for mortgages based on faulty data earlier this year, it’s no surprise to see how Bank of America is trying to cover its “debt.” Starting next year, Bank of America will charge customers $5 per month for using a debit card.
This new monthly increase for debit card owners comes at a time when families and consumers of the middle-class are still hurting. According to the US Comptroller of Currency, 1 in 5 Americans who received help under a program aimed at reducing foreclosures defaulted again within a year. Large American banks are also scaling back on the amount of rewards consumers receive, implementing new monthly fees, raised existing fees or imposed stricter requirements to have previous fees waived. But the banks aren’t really that bad are they? You decide for yourself.
Recently a worker for Countrywide Bank was sentenced to eight months in prison and made to pay $1.2 million dollars for illegally downloading and selling private data of customers. Nationwide, complaints of bank fraud have gone up 88% since this time last year. The fraud just keeps on keepin’ on.
But don’t worry about that stuff though. I bet the banks just made an honest mistake. Really… It’s not like they have a system in place that is made to rip off the general public in order make millions more in cash. I mean, the banks need to go back to being regulated like they were under the Reagan, Clinton and Bush years. Because that worked out so well for everyone…
What’s really going on is that the banks are tired of being exposed for their predatory practices. They’re like, “How dare you call us on our bluff?!” You would think they would do something to curb those practices, but if you know any history of American banks, you would understand that banks don’t get regulated or held responsible for any mistakes they make, no matter how devastating. And if they do get regulated, the consumer pays for it.
Instead of not being the predators they have always been and cooperating with the demands of the people who fuel their business, their first thought is to fight against any and all regulation. In a span of three months, bank lobbyists on K Street have spent $27 million to try to repeal the act.
There have been some more significant wins by the bank lobbyists. After the 2007-8 Great Recession, banks lobbied tens of million of dollars in the span of a few months to make sure they wouldn’t have to pay for their crimes and most importantly, to make sure the public remained oblivious of their plots. In late 2010, Congress was split on the Dodd-Frank Act—an act that was aimed to curb the loopholes and fraud occurring within Wall Street. The banks got newly elected Senator Scott Brown (R-MA) to push to remove a bank tax that would have raised $19 billion. They also got Brown to water down the legislation and get the Volcker Rule blocked—a rule that would have limited Wall Street’s ability to make risky trades with dollars backed by the government.
Many people will say that the reason BofAis raising fees is because of Obama’s job-killing, regulation overhaul. I respectfully disagree. The reason the banks are doing so is because they know they can get away with blaming it all on Obama. And people will buy into it. There’s a small group of Americans that knows that Wall Street got itself into this mess. I mean, aren’t they the experts who know all about economics? But some of us know that when they receive high profits, they claim it was all them, but when the screw up, it’s all the government’s fault. You can’t have your cake and eat it too, unless of course you’re Wall Street.