Sometimes when I read Congressional Members’ rationale for certain bills it makes me literally want to rip my hair out of my head.  Luckily I refrain since I am the only one of my brothers with hair left.  It is ridiculous that no one seems to learn the law of unintended consequences.

A Company exists to provide a service to make money.  The executives and board members of that company have a fiduciary duty to be profitable.  So when someone impedes on their ability to make money it is their RESPONSIBILITY to figure out a way to make up the shortfall.

It happened with the CARD ACT which was supposed to protect credit card users.  If I am allowed to quote myself paraphrasing someone else:

  1. Higher Interest Rates – The average jumped over 2% since enactment
  2. Higher Fees – Whaaaat? I think this Act was going to save us from higher fees? Nope. The Act just makes them change where they get their money from
  3. Less Credit – You are going to restrict the credit lenders so they have to be more careful
  4. Non-Working Spouses May be Denied Credit – A really interesting unintended consequence that should have been known since one of the provisions is that if you don’t work you can’t claim household income as your own.
  5. More Bankruptcies – Not sure I agree with this one as there is a difference between correlation and causation

Well congress and the media are again surprised that something they did had a negative unintended consequence.

Bank of America’s New Fee is Not Their Fault It is Congress’

Let me be clear, I am not a fan of Bank of America.  I think they are a bureaucratic nightmare of a company that people use because they think they are better because they are bigger.  Notwithstanding, their new fee is NOT their fault.

Bank of America’s New Fee

As reported by Forbes,

Starting early next year, Bank of America will charge $5 in each month that customers use a debit card for a transaction. There will not be a charge in the months you don’t use your debit card, and ATM withdrawals are not included.

Word of this new fee came two days before the October 1 implementation of the new interchange fee regulations for debit card purchases. Banks are expected to lose billions of dollars with this reduction in swipe fees. Before the recent legislation, the interchange fee averaged 44 cents per transaction. Now, the reduced fee will be 21 cents plus an additional amount to cover losses from fraud. The interchange fee on credit cards did not change.

Wait a minute, so you (read: Congress) took away half of the fee they received per transaction and are outraged that they need to make up the money somewhere else? When then you are just stupid.  Period.

If I were a Bank of America stockholder I would be applauding this move. I want profits and if the government shut the door the company better find a window!