You’re not the only one who’s pissed at Bank of America.
On Monday President Obama came out swinging against Bank of America’s new $5 fee for customers to use their own debit cards. “Banks don’t have some inherent right to get a certain amount of profit, if your customers are being mistreated,” he said.
Last night Tim Geithner went even further on CNN, saying, “We’re going to push back even harder,” and even positioning the Administration in an “us vs. them” adversarial relationship to the banking industry, saying “we will prevail.”
To anyone who’s been paying attention over the last three and a half years, this might sound a wee bit ironic. The government’s very public bailout of the banking system raised populist ire that still has taxpayers quaking. And this was trumped only by its very secret bailout of an additional $1.2 trillion in almost comically favorable loans that were just discovered this summer, when Bloomberg uncovered it in a Freedom of Information Act request. And who authorized the $1.2 in loans? Why, the Treasury, of course.
So where does Geithner get off blasting Bank of America for its predatory banking? Part and parcel of the bailouts over the last three years (both public and secret) has come a modest increase in the regulations to oversee the banks and try to ensure they’re not left to exercise their rapacious tendencies at will.
The Dodd-Frank Bill, passed last year, contained a number of provisions that banks found too offensive to bear, especially the rule reducing the amount they’re allowed to charge businesses for debit card transactions from 44 cents to 21 cents.
Dick Durbin, who introduced that clause, claims 21 cents is in line with what it actually costs banks to complete those transactions. The banks allegedly introduced the new $5 fee for customers in effort to make up that lost revenue.
Even though it was government who saved most banking institutions in 2008, Geithner now says, “They are trying to weaken those reforms,” as if the bailouts should come with no mandate to change.
Exasperated, Dick Durbin yesterday said “Now is the time for bank customers to say enough is enough.” Politico reports he “urg[ed] customers to cancel their accounts at Bank of America and other banks that charge additional fees for checking accounts and debit cards.”
Watch Geithner’s interview with CNN below.