This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Obama and Durbin Should Back Off the Banks

NEW YORK ( TheStreet) -- It's time for the politicians to back off from their drive-by bank bashing and let the free market operate.

Recent statements by President Obama and Senator Dick Durbin (D-Ill.) following Bank of America's (BAC - Get Report) decision to begin charging a $5 monthly fee to customers who use their debit cards for purchases, have gotten out of hand.

Senator Dick Durbin

Senator Durbin's statement on the Senate floor that Bank of America's customers should "vote with your feet, get the heck out of that bank," is a reckless statement for someone in his position. It's one thing to introduce or support legislation designed to protect consumers from confusing and expensive fees, but quite another to single out one company that is charging a fully disclosed fee to provide a service.

Maybe the Senator's problem is with capitalism itself.

President Obama was more reasonable and measured in his negative response to Bank of America's plan for the fees:

In an ABC interview on Monday, the president said the banks "don't have some inherent right just to, you know, get a certain amount of profit, if your customers are being mistreated."

But are they being mistreated? Bank of America's coming $5 monthly service charge for customers using their debit cards to make purchases (they won't be charged for making cash withdrawals at Bank of America ATMs) is not some tricky "hidden fee." The fee has been fully disclosed, in advance, and is easy to avoid.

Even the president admits that the market may solve the "problem," of the new fee hoping that many banks will determine that "this is actually not good business practice."

The banks have only themselves to blame for the legislation that led to curbs on practices leading to excessive fees.

The Credit Card Accountability Responsibility and Disclosure Act of 2009 or CARD Act, put an end to several abusive practices leading to some exorbitant fees, including "universal default," double-cycle billing, mailing bills only two weeks before payment was due, playing games and causing additional late fees by positing received payments the following day, etc. This was good, since the lenders were being tricky.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BAC $16.67 0.00%
JPM $66.20 0.00%
SCHW $31.90 0.00%
TD $44.56 0.00%
WFC $56.21 0.00%

Markets

DOW 18,126.12 -36.87 -0.20%
S&P 500 2,120.79 -2.69 -0.13%
NASDAQ 5,097.9760 -8.6170 -0.17%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs