…a shame if anything should happen to it! The Democrats took gangster government to a new level today with attacks on Bank of America by Dick Durbin and President Obama. The attacks arise out of the Durbin Amendment to Dodd-Frank, which, as we wrote here, directed the Fed to fix the fees which banks can charge for debit card transactions. The rate set by the Fed is inadequate and will take something like $14 billion out of the pockets of major banks. So a number of banks, including Bank of America, have announced that they will replace the lost revenue by charging a monthly fee for debit cards; in BoA’s case, $5. Even though this was entirely predictable (and was in fact predicted), it has enraged the Democrats.
Speaking in the Senate, Durbin encouraged customers to desert BoA and go somewhere else:
Bank of America customers, vote with your feet, get the heck out of that bank. Find yourself a bank or credit union that won’t gouge you for $5 a month and still will give you a debit card that you can use every single day. What Bank of America has done is an outrage.
Here is video of Durbin’s speech:
It is unprecedented, as far as I can recall, for a government official like Durbin to urge customers not to do business with a particular company because he doesn’t like that company’s pricing policies. If another bank offers customers debit cards for $3 and there are no compensating advantages at BoA, it would be reasonable for a customer to shift its business elsewhere. But businesses are entitled to price their products and services however they choose. It is up to consumers to decide which company’s offer they want to accept, if any. The Democrats are such inveterate bullies that they refuse to acknowledge this simple proposition.
President Obama also attacked Bank of America:
Barack Obama blasted Bank of America’s plan to charge $5 a month for debit card purchases.
“This is exactly why we need this Consumer Finance Protection Bureau that we set up that is ready to go,” Obama said. “This is exactly why we need somebody whose sole job it is to prevent this kind of stuff from happening. … You can stop it because if you say to the banks, ‘You don’t have some inherent right just to – you know, get a certain amount of profit. If your customers – are being mistreated. That you have to treat them fairly and transparently.’”
The President said this in an interview with ABC.
Actually, of course, BoA’s pricing is perfectly transparent–$5 a month. If you can find a better deal somewhere else, you are welcome to take it.
Obama’s ignorance of economics is impressive in its comprehensiveness. We need a Consumer Finance Protection Bureau to “prevent this kind of stuff from happening.” What kind of stuff? Banks charging money for their services, like everyone else does? Banks “don’t have some inherent right just to get a certain amount of profit.” Of course not. It is only government that is entitled to your money, regardless of how well or poorly government serves you. But banks certainly do have an inherent right to charge prices that are set by them, not by a government agency, as long as those prices are not collusive.
2012 can’t come soon enough.