http://www.usatoday.com/money/perfi/columnist/block/2009-10-19-bank-of-america-card-fee_N.htm

It's nothing new, but I figured we could all take a moment to get outraged together.

10/22/2009 7:06:13 PM

Bank of America = Satan

10/22/2009 7:08:32 PM

it's their right. hopefully if customers flee the bank, the government won't feel compelled to bail them out and subsidize this sort of asinine foolishness.

10/22/2009 7:28:06 PM

FUck Bank of America. I swear they sit around on executive meetings figuring new crafty ways to screw otherwise honest consumers out of their monies. While a smart consumer should take their banking elsewhere the logical rationing often gets overlooked by little old grandmas, as an example. We as a country should not condone such unethical banking practices to begin with.

10/22/2009 7:48:39 PM

I, for one, am sure glad that we had to bail them out, when folks like myself and others were arguing to just let them fail once and for all.

10/22/2009 7:54:49 PM

Banks changing their business models to something crappier than it used to be in response to government legislation making it more difficult to conduct business the way they used to. No one could have seen that coming.

Quote :

"You know, as much as I think these rules are dumb - essentially amounting to protecting people from their own stupidity - it wouldn't bother me much at all were it not for some fairly explicit messages that this is going to translate into higher rates and less benefits for people who actually pay their cards on time and don't carry a balance. In other words, responsible people like myself. To sum it up: once again, people who are responsible with their finances will get screwed to bail out those who are not. People who didn't buy houses they couldn't afford (including those of us who had to - horror of all horrors - rent) are now forced to bail out those who didn't. People who used their credit responsibly will now see it constrained for those who didn't. Fantastic. I'm sure there's a lesson in here about moral hazard which will be completely ignored. Again."

DrSteveChaos

http://www.thewolfweb.com/message_topic.aspx?topic=566871

10/22/2009 8:03:57 PM

ahahaha. I like it. A fee for honoring your agreement. Anyone who would enter in to that kind of agreement is an idiot

10/22/2009 8:13:35 PM

Quote :

"1337 b4k4: Banks changing their business models to something crappier than it used to be in response to government legislation making it more difficult to conduct business the way they used to."

This new BoA fee looks more like banks tryna get away with whatever they can before the government legislates against the practice. It's a game where the banks do whatever dirty shit they can do, the government finds out about it, threatens to regulate, then the banks back off and straighten up for a while until the coast is clear, and then they start in with new tricks.

The law does make it more difficult for banks to steal from consumers, and that's a good thing. The fact that banks come up with new ways of stealing doesn't mean the law was wrong for banning the old methods of stealing.

They're like children who are told they can't have chocolate chip cookies before dinner so they gorge on sugar cookies instead and then try to act like they did nothing wrong.

10/22/2009 10:13:02 PM

And this tit-for-tat arms race was totally unpredictable.

Nope. Nobody saw it coming.

Ever.

^^^

10/22/2009 10:16:41 PM

You predicted it. Good call!


But I don't get your point...banks would have behaved better if they weren't regulated in the first place?

10/22/2009 10:53:27 PM

No, banks will generally seek an equilibrium of profits. You squeeze on one end and they'll shift to somewhere else. In other words, you squeeze on interest and late fees, and they'll move to recoup the costs somewhere else. TANSTAAFL: there ain't no such thing as a free lunch. You think that they're just going to willfully eat the loss? Keep dreaming.

Hammer down on banks charging the irresponsible and they'll just push the fees somewhere else, on everyone. Which includes responsible borrowers who actually pay their cards on time and don't carry an excessive balance they can't pay.

Interestingly enough, the same is true for insurance: make them insure everyone with no cost differential, and they'll charge everyone more. Of course, saying as much does nothing but raise hackles in the halls of Congress. I'm sure we'll get to test out to see if I'm right on this one again as well.

10/22/2009 11:01:48 PM

oh, we'll get to test it out. and the crocodile criers will just blame it on evil, greedy people

10/22/2009 11:17:15 PM

^^^ Banks will behave as they do, which is to find a way to make the most profit while having the most and happiest customers. Fees for having a revolving credit account are not new. Amex has charged them for the longest time, and annual fee cards were pretty common up until the last decade or so (hence why ads still talk about "no annual fees" as if it's a distinguishing feature). But people wanted better, they wanted no fees, big grace periods, cash back and rewards. All of that money had to come from somewhere, so the banks figured out that they could make that money by being especially harsh on people with lousy credit skills because they were the least likely to complain and the least painful to lose if they did complain. Your sky miles card is subsidized by all the college kids getting their free t-shirts.

Now that such practices have become harder to do, the banks have gone on to getting their money back from everyone else. Does it suck? Absolutely. Was it unexpected? Not at all. Should we have bailed them out so that they could be around to do this? Absolutely not.

10/23/2009 8:03:22 AM

Quote :

"oh, we'll get to test it out. and the crocodile criers will just blame it on evil, greedy people"

Yes, just as they blamed this entire crisis on Wall Street being "greedy." The thing is, in a normal economy, greed is fine. People that are greedy are also afraid of loss. That fear of loss is what balances greed.

When the government is willing to step in and guarantee loans, guarantee banks, and bailout companies...you've removed that risk of loss. Greed can go unchecked, because everyone knows that the government will cover them. I'm not sure that the politicians have fully understood the concept of "moral hazard." We shouldn't be surprised when banks do this kind of thing.

10/23/2009 8:51:42 AM

The thing i love the most about the bailouts was how selective they were. Instead of allowing 12 or so large banks to fail and split into multiple smaller banks, they allowed 6 to fail and gave the remaining 6 taxpayer money to buy off the good parts. In the end we're left holding all the bad debt and we've created even bigger banks.


And to get back to credit cards, there are 2 kinds of people with credit cards. Retards who dont understand how they work that deserve what they get and people who use them for the rewards. If you're a retard, dont worry the fed will bail your stupid ass out. If you're using them for the rewards, if the rewards aren't worth the fees cancel the card. Pretty goddamned simple.

10/23/2009 9:31:01 AM

10/23/2009 10:10:47 AM

Quote :

"If you're using them for the rewards, if the rewards aren't worth the fees cancel the card. Pretty goddamned simple."

No doubt that the people who are smart enough to figure out how to use credit cards without swallowing themselves up in debt will figure this out on their own. However, it's irritating - yet again, responsible people will pay the price of the irresponsible. Bailing out bad banks who made bad loans to people who bought more home than they could afford - sorry responsible homeowners and renters! Hammering down on credit terms because some people can't balance a checkbook, much less manage credit - sorry, responsible borrowers!

Responsible people are smart enough to adapt. The problem is that they shouldn't have to just because the government decides to intervene to yet again disconnect irresponsible actions from consequences.

10/23/2009 10:38:51 AM

We would cut down on home invasion robberies if we decrminalized street muggings.

10/23/2009 12:26:17 PM

I'm astonished that there would be multiple people still set on blaming irresponsible people no matter what.

Like, it's all people and the government?

The banks didn't behave badly at all?

10/23/2009 12:33:02 PM

oh it's a solid 33/33/33 split with 1 being chance

government, banks, people

10/23/2009 12:49:09 PM

Quote :

"Like, it's all people and the government? The banks didn't behave badly at all?"

Quote :

"Bailing out bad banks who made bad loans to people who bought more home than they could afford - sorry responsible homeowners and renters!"

Please try again.

[Edited on October 23, 2009 at 1:05 PM. Reason : .]

10/23/2009 1:05:38 PM

Quote :

"I'm astonished that there would be multiple people still set on blaming irresponsible people no matter what. Like, it's all people and the government? The banks didn't behave badly at all?"

It's not a simple matter of people being irresponsible. People, and banks, had an incentive to be irresponsible, because of government intervention.

Think back to before the housing bubble burst. Real estate was the hot item. Buying a house would allegedly pay for itself, because housing prices just kept going up. To suggest that house prices could go down in the future was absurd. Everyone was saying prices were going to go up, up, up, and if you bought a house, you could basically quit your job because it was going appreciate so much that you wouldn't need to work. Millions of Americans thought this, and it was the mainstream thinking. Fast forward to 2007. ARM rates reset, and suddenly these people couldn't pay their loans.

Banks, at the same time, had given out these loans. Interest rates were low (entirely due the Federal Reserve), which artificially increased demand, and it became incredibly easy to get a loan for a house. There was Fannie and Freddie, which essentially had the government's guarantee that if people couldn't pay their loans, the government would have it covered.

Then you had the securitization industry which was putting good loans in with bad loans, and all those loans had Triple A ratings. Basically, these were the subprime mortgages. Now, should the securitization industry have known that houses couldn't go up forever? Most people were saying they would. The whole reason you had this attitude was because the Federal Reserve had lowered interest rates in response to the 2001-2002 recession, and way more people were getting loans than would have normally in a free market.

So, people were getting loans because it seemed like the smart thing to do and everyone said it was, and it was easy to get loans. Banks were giving out these loans because they still made money, and it was all securitized. Now, I don't know why any of these securitized loans were being given Triple A ratings. The government, and the federal reserve, are ultimately the ones that caused this mess, though. People didn't just randomly decide to spend too much.

[Edited on October 23, 2009 at 1:10 PM. Reason : ]

10/23/2009 1:08:42 PM

Quote :

"I'm astonished that there would be multiple people still set on blaming irresponsible people no matter what. Like, it's all people and the government? The banks didn't behave badly at all?"

And you think the proper response to the banks behaving badly is to give them yet another sustainable competitive advantage? Banks are not bringing back these fees because they are evil, they were just as evil last year and yet did not, they are doing it because now, thanks to coming legislation, they can charge the fees without fear of competition. This bill like most cuts in favor of those it will regulate by making life harder for their smaller competitors.

So, once again, the banks act badly and you give them a present. They are going to more profitable than ever. And there you are, unwittingly arguing in favor of their interest and against liberty and the competition it used to bring.

10/23/2009 1:27:42 PM

At BofA and AIG close to a majority of the top executives whose salaries were to be cut have already left.
http://www.marginalrevolution.com/marginalrevolution/2009/10/going-galt.html

Quote :

" "There's no question people have left because of uncertainty of our ability to pay," said an executive at one of the affected firms. "It's a highly competitive market out there." At Bank of America, for instance, only 14 of the 25 highly paid executives remained by the time Feinberg announced his decision. Under his plan, compensation for the most highly paid employees at the bank would be a maximum of $9.9 million. The bank had sought permission to pay as much as $21 million, according to Treasury Department documents. At American International Group, only 13 people of the top 25 were still on hand for Feinberg's decision."

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/22/AR2009102204422.html?hpid=topnews

10/23/2009 6:12:12 PM

BofA probably wouldn't be feeling the pinch had they not been strongarmed into acquiring Merril Lynch which was on the brink of closing.

10/23/2009 7:56:22 PM

Bank of America repeatedly lost $5,000 of my money, often at really bad times. This resulted, among other things, in bounced rent checks. They almost cost me my apartment. The only halfway decent thing they did was write my landlord a letter explaining that they had fucked it up, not me.

I ran to SunTrust and have had no problems with them so far.

10/24/2009 3:50:13 AM