Debit cards and ATMs were supposed to save everyone — banks and customers — time and money. Bank officials, including those at Wells Fargo and Chase, tossed that rationale out the window in the face of federal regulations to rein in excessive fees. No longer able to charge high fees to merchants, the banks pouted and announced they had no choice but to extract the fees from consumers. It was all Congress’ fault, you see.
Rep. Frank Pallone (D-6th Dist.) called out Bank of America for attempting to circumvent regulations, and noted the bank’s president took home nearly $2 million in compensation last year. He called the fee “a surcharge on working people.”
The editors attribute B of A’s retrenchment to “mounting consumer outrage” and competition from “other banks and credit unions”. “So credit not just consumer rage, but the free market,” the editors brazenly assert, just a few paragraphs after they approvingly cite “regulations to rein in excessive fees…to merchants”!
In an epilogue to my previous post on the subject, I’ve left the following comments:
Did B of A respond to consumer and competitive pressures? Or were they knee-capped by thug politicians like Pallone, Durbin and other Democrats’ mob-like threats of antitrust prosecutions and regulatory reprisals?
The double standard here is obvious. Those “regulations” referred to are the price controls forcing banks to lower “excessive” fees charged to merchants – fees mutually agreed to through voluntary contracts and legitimized by widespread market acceptance. When “consumers” attempt to “circumvent” the $5 fee, it is hailed as a “small revolution”. When B of A attempts to “circumvent regulations” to recoup legitimate profits stolen at the behest of the merchant lobby - through an equally moral and legal addition of fees on debit cards - they are threatened, demonized, and ridiculed as “pouters” who dared to defy the imperial congress.
Philosopher Ayn Rand warned half a century ago that “We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission; which is the stage of the darkest periods of human history, the stage of rule by brute force.” It appears we have reached that stage, at least in finance. This congressional micro-managing of financial transactions and the political bullying of B of A shows that economic fascism is here.
As a final word, let me add that this episode puts the lie to the Left's propaganda that the financial crisis was caused by the "free market". A market in which government can impose pricing regulations such as those cited here is anything but "free".