Photo: US Senate
Senator Dick Durbin (D-Ill) fired back at Bank of America and its CEO after the bank announced a $5 monthly fee for its debit card holders. [via Politico]The Charlotte, North Carolina-based bank cited the Dodd-Frank financial reform bill, as one reason for the new fee.
“The economics of offering a debit card have changed with recent regulations,” a spokesman for BofA said last week.
Durbin, the senator who drafted an amendment that affected the economics of debit cards (the Durbin amendment ruled that debit interchange fees would be capped at 12 cents plus 0.05% of the transaction, with the possibility of an additional cent if certain criteria are met.), doesn’t buy that argument.
He said in a statement yesterday:
“It is particularly hard to believe this fee would come from a bank with a track record like Bank of America. After helping to drive our economy off the cliff’s edge in 2008, Bank of America was happy to accept a $45 billion federal bailout for their stupidity, their greed, and their stupidity and it was just as happy to take that money and hand out $3.3 billion in employee bonuses in the same year 2008.”
He also urged BofA customers to “get the heck out of that bank.”
THEN, he also wrote a strongly worded letter dated October 3 to the embattled bank’s CEO Brian Moynihan: [via Politico]
“Your bank’s spokespeople and advocates have argued strenuously that I am responsible for your decision to charge this new fee on all but your wealthiest customers.
In response to this I will simply point out that my legislation was enacted in July 2010. In June 2010, the Wall Street Journal reported that your bank was “preparing new fees on basic banking services” for 2011 and that “Bank of America customers who only want a low-volume checking account will likely be asked to pay for it.” (“End is Seen to Free Checking” The Wall Street Journal, June 16, 2010). In other words, it is on record that your bank was preparing new fees just like this one well before swipe fee reform became law.”
Durbin also went as far to say that if Moynihan really had the best interest of his customers in mind he should return his own bonus to them.
“You could, for example, choose to give 1.8 million of your customers a reprieve from your new fee by returning the $9 million bonus you received on top of your $950,000 salary in 2010. That choice is yours to make.”
The Durbin Amendment, which was a last minute amendment to Dodd-Frank, ruled that debit interchange fees would be capped at 12 cents plus 0.05% of the transaction, with the possibility of an additional cent if certain criteria are met.
Like Bank of America, other banks are currently considering adding fees.