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Thread: The Benefits of Financial Reform

  1. #1
    SiriuslyLong is offline
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    The Benefits of Financial Reform

    Here's a scientific concept. It's an oldy, but a goody. Ready? For every action there is an equal and opposite reaction. It applies to health care reform as well.

    Once again, responsible people are penalized. Spread the wealth baby. lol.


    Say goodbye to traditional free checking

    As banks feel squeeze from new regulations, say goodbye to the old free checking


    FILE - In this Jan. 25, 2009 file photo, a Bank of America branch office is shown in New York. Say goodbye to free checking _ at least at Bank of America, which will start charging for the most basic services, like $8.75 just to talk to a teller. (AP Photo/Mark Lennihan, file)

    Pallavi Gogoi, AP Business Writer, On Tuesday October 19, 2010, 9:27 pm EDT
    NEW YORK (AP) -- Free checking as we know it is ending.

    The days when you could walk into a bank branch and open an account with no charges and no strings attached appear to be over. Now you have to jump through some hoops -- keep a high balance, use direct deposit or swipe your debit card several times a month.

    One new account at Bank of America charges $8.95 per month if you want to bank with a teller or get a paper statement.

    Almost all of the largest U.S. banks are either already making free checking much more difficult to get or expected to do so soon, with fees on even basic banking services.

    It's happening because a raft of new laws enacted in the past year, including the financial overhaul package, have led to an acute shrinking of revenue for the banks. So they are scraping together money however they can.

    Bank of America, which does business with half the households in America, announced a dramatic shift Tuesday in how it does business with customers. One key change: Free checking, a mainstay of American banking in recent years, will be nearly unheard of.

    "I've seen more regulation in last 30 months than in last 30 years," said Robert Hammer, CEO of RK Hammer, a bank advisory firm. "The bottom line for banks is shifting enormously, swiftly and deeply, and they're not going to sit by twiddling their thumbs. They're going to change."

    In the last year, lawmakers in Washington have passed a range of new laws aimed at protecting bank customers from harsh fees, like the $35 charged to some Bank of America customers who overdrafted their account by buying something small like a Starbucks latte.

    These and other fees were extremely lucrative. According to financial services firm Sandler O'Neill, they made up 12 percent of Bank of America's revenue. On Tuesday, the bank took a $10.4 billion charge to its third-quarter earnings because the new regulations limit fees the bank can collect when retailers accept debit cards.

    Bank of America CEO Brian Moynihan acknowledged in a conference call that overdraft fees were generating a lot of income. But the bank was also losing customers who were often taken aback by the high hidden fees.

    Checking accounts were being closed at an annual rate of 18 percent, he said, and complaints were at an all-time high.

    So Moynihan ended overdraft charges on small debit card transactions. He says the rate of account closings have since dropped 27 percent.

    To make up for lost fees, he also started thinking of new products. In August, the bank introduced a new "eBanking" account, where customers were offered a free checking account if they banked online. The catch: If they opt for paper statements, or want access to tellers for basic transactions, they would be charged a monthly fee of $8.95.

    "Customers never had free checking accounts," Bank of America spokeswoman Anne Pace said. "They always paid for it in other ways, sometimes with penalty fees."

    This summer, Bank of America also started offering "emergency cash" for a $35 fee to customers who went to the ATM for withdrawals that would exceed their bank balance. Moynihan said 50 percent of these customers opted to go ahead with the fee.

    "We are now in an era where consumers will be buying products from banks, even if it's a checking account," said Brian Riley, senior research director for bank card practice at consultant TowerGroup. He noted that several banks have started charging $7.50 for paper statements.

    "Paper and print costs around $2.25, add postage to that, and if banks are losing income from other avenues, someone has to pay for it," said Riley.

    Economic research firm Moebs Services says free checking usage has been steadily rising in recent years before falling this year. Last year 81.5 percent of U.S. banking customers had free checking, but that fell to 72.5 percent this year.

    Large banks are also under additional pressure because of curbs from new laws on high-risk trades with complex derivatives. Their trading desks have been large revenue and profit generators for banks in recent years.

    Michael Moebs, the founder of Moebs Services, said it is now up to the smaller Main Street banks to see an opening and grab customers from the big banks.

    "Free checking could become a mainstay of community banks and credit unions in the future," Moebs said.

  2. #2
    Atypical is offline
    JEEZ, you're gullible, SL.

    Has the current financial meltdown taught you NOTHING (GREED and MORE GREED). AND you believe financial legislation is the reason banks are raising costs to consumers? And you don't think it should be done after what happened??????? AND they still got away with it.

    It's an EXCUSE so they can continue to get all they can from consumers. If you pissed off a bank president they would probably blame you for a new fee. Do you know what the spread between what banks give us and what they lend is?

    The healthcare legislation was essentially written by the healthcare companies so their increasing costs are just to get more using that as an excuse. Read Wendell Potter. NOW!

    Corporations do not ever want anything to interfere with their greed. I can give you hungreds of examples. Coal mine deaths in WV ring a bell! Do you care when a company says money is more important than someone's life????? It happens every day! Many times.

    Wake up!
    Last edited by Atypical; 10-21-2010 at 03:30 PM.

  3. #3
    SiriuslyLong is offline
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    Quote Originally Posted by Atypical View Post

    Corporations do not ever want anything to interfere with their greed.

    Wake up!
    Jeez Atypical, what is a "for profit" company supposed to do? You call it "greed", I call it "purpose". If a company doesn't make money, it won't be a company for long. Same cannot be said about government. They can do whatever they want.

    I know you loathe over simplification, but when a "not for profit" and generally unaccountable government "forces" policy on a "for profit" enterprise, what is the enterprise going to do? Tell its stockerholders "sorry, but your EPS is going to decrease, and you are going to have to accept it". It just doesn't work that way. Do you have a better idea?

    I wasn't clear about your point on healthcare reform. Are you saying the legistlation is not effective? All I keep hearing, including my own company (it is open enrollment time) is that premiums are going up as insurance companies have "more to insure" thanks to the legislation. It's only natural for prices to increase.

    I view having to pay for a checking account due to this financial reform as a penalty for being responsible. The irresposible get "protections" and the responsible pay for them. That's spreading the wealth.

  4. #4
    Atypical is offline
    For profit does not mean "get it all, no matter what. Nothing is more important than profit".

    That's all I mean. If safety should improve to save lives DO IT. If it costs money f**k it. So what!. Do it because it's right!!! But that's NOT WHAT HAPPENS. Are you not aware of that???

    I agree about government. There may be little responsibility if the spigot never closes. I DON"T LIKE IT EITHER. I want government to avoid spending any money they can't justify. But as Havakasha has said to you, government has a place - an important one - as long as they are responsible.

    I have posted many times about goverment overreach. Have you noticed?

    Stockholders should not complain over responsible actions by corporations. Don't you think BP stockholders would rather the company didn't have to spend to atone for their greed, incompetence and ethical indifference??

    The healthcare legislation is only effective in a small way because the industry okayed it. It is being phased in over too much time as a sop to the companies. Single payer is the only way to go if costs and efficiency are important - and they should be the only consideration!

    "More to insure". Bullshit. Do you know why the mandate, which makes the stupid think Obama is a socialist criminal was added to the bill. To pay the healthcare companies for their agreement to the legislation. And they DID agree no matter what you heard. Do you know how many more insureds and income they will get from that "mandate"? MILLIONS.

    Stop saying that you are paying for the "irresponsible". That has almost nothing to do with what we're talking about. If a business has a large number of deadbeats who do not pay it obviously can be a problem. If a bank (did you read my comment re the "spread") makes 1/2 % less profit in a year is that a problem? Exxon has not paid taxes for awhile and has gotten entitlements during the same period. Isn't that a problem? That's one of my concerns. Everyone should be concerned.

    If the public would care as much about ethics, responsibilty, honesty and capability in government, business, the military and especially the communications industry (and all other areas) as they do about movies, sports and celebrity tripe we would all be better off.

    If that happened (never happen) Palin, et al, would be a joke that would be laughed off a stage. Limbaugh, the hypocrite, would be back in sports unless his drug use prevented it.
    Last edited by Atypical; 10-21-2010 at 06:29 PM.

  5. #5
    SiriuslyLong is offline
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    Quote Originally Posted by Atypical View Post
    For profit does not mean "get it all, no matter what. Nothing is more important than profit".

    That's all I mean. If safety should improve to save lives DO IT. If it costs money f**k it. So what!. Do it because it's right!!! But that's NOT WHAT HAPPENS. Are you not aware of that???

    I agree about government. There may be little responsibility if the spigot never closes. I DON"T LIKE IT EITHER. I want government to avoid spending any money they can't justify. But as Havakasha has said to you, government has a place - an important one - as long as they are responsible.

    I have posted many times about goverment overreach. Have you noticed?
    And I agree that profit at all and any cost is absolutely wrong. On the other hand, coal mining and off shore oil drilling, for example, are implicitly dangerous. Many companies I deal with have strong safety programs. I think safety is more of a concern that you realize. Safety pays in the long run.

  6. #6
    SiriuslyLong is offline
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    That's quite an edit.

    ""More to insure". Bullshit. Do you know why the mandate, which makes the stupid think Obama is a socialist criminal was added to the bill. To pay the healthcare companies for their agreement to the legislation. And they DID agree no matter what you heard. Do you know how many more insureds and income they will get from that "mandate"? MILLIONS."

    So are you telling me that cost for insurance companies will NOT go up? As I recall, children to the age of 26 are covered regardless of their status. There is no more lifetime cap on the amount of insurance money that can be paid, and of course, preexisting conditions are now covered. Are you telling me those will not result in real costs to insurance companies?

  7. #7
    Atypical is offline
    Quote Originally Posted by SiriuslyLong View Post
    And I agree that profit at all and any cost is absolutely wrong. On the other hand, coal mining and off shore oil drilling, for example, are implicitly dangerous. Many companies I deal with have strong safety programs. I think safety is more of a concern that you realize. Safety pays in the long run.
    When you look at the ENTIRE world, as I do, there is more not being done by a mile than what is.

    The President of Exxon said recently there is "no industry capability presently to ensure that another catastrophe like BP will not occur again". (paraphrase)

    The Chilean mine disaster is lauded as showing what can be done in an emergency. We all were happy the rescue happened. Do you know how many Chilean miners have died in recent years? The country is a mess re mine safety.

    I am sorry to inform you the record of concern compamies have for their employees is sickening. Have you heard about processing plants where employees are asked to work faster and as a result carpal injuries and other injuries occur regularly. And the employees can't complain because they have no power (unions are baaad). They are fired as some are illegal and others are afraid for their jobs. Not to metion animals put to death poorly for our food because of speed concerns.

    Just get the profit, get the money. goddamn it get the money!!
    Last edited by Atypical; 10-21-2010 at 05:23 PM.

  8. #8
    Atypical is offline
    Quote Originally Posted by SiriuslyLong View Post
    That's quite an edit.

    ""More to insure". Bullshit. Do you know why the mandate, which makes the stupid think Obama is a socialist criminal was added to the bill. To pay the healthcare companies for their agreement to the legislation. And they DID agree no matter what you heard. Do you know how many more insureds and income they will get from that "mandate"? MILLIONS."

    So are you telling me that cost for insurance companies will NOT go up? As I recall, children to the age of 26 are covered regardless of their status. There is no more lifetime cap on the amount of insurance money that can be paid, and of course, preexisting conditions are now covered. Are you telling me those will not result in real costs to insurance companies?
    Do you know how much "overhead" (25%-35%) they claim and what they make on exclusions to policyholders. Do you know that the United Healthcare ceo made *BILLIONS a year recently. You don't know anything about it. Is this evidence of greed? You bet your ass it is!

    And what if their profit drops a little and people get what they expect and pay for. That's what these companies should be doing. Isn't that what they are in business for? If they did that, really did it right and it actually hurt them financially, then I would agree that rates should rise appropriately. But where is it written that they are OWED a certain profit and that they can do whatever it takes to get it. BS!

    This is why you need to read something authoritative from an industry insider and not debate it with me. (Wendell Potter) I learn this stuff because I care to know. I want to know and will do whatever it takes. It's better than reading a detective story. It is everything anyone could want; sadness, murder, greed, psychopathic behavior, deviousness, lying and every other human pathology.

    If you ever do read anything credible it will change you - if you care about others - if you have empathy. I'm a corporate guy also who has seen what ugliness there is in corporations. NO NOT ALL. But greed and ARROGANCE is pervasive and accounts for almost all (incompetence the rest) of the inhuman behavior. Remember eleven people died on the BP rig. I am talking about important concerns not just a few cents or dollars wasted or kept without reason.
    Last edited by Atypical; 10-21-2010 at 06:35 PM.

  9. #9
    SiriuslyLong is offline
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    Quote Originally Posted by Atypical View Post
    When you look at the ENTIRE world, as I do, there is more not being done by a mile than what is.

    The President of Exxon said there is "no industry capability presently to ensure that another catastrophe like BP will not occur again". (paraphrase)

    The Chilean mine disaster is lauded as showing what can be done in an emergency. We all were happy the rescue happened. Do you know how many Chilean miners have died in recent years? The country is a mess re mine safety.

    I am sorry to inform you the record of concern compamies have for their employees is sickening. Have you heard about processing plants where employees are asked to work faster and as a result carpal injuries and other injuries occur regularly. And the employees can't complain because they have no power. They are fired as some are illegal and others are afraid for their jobs. Not to metion animals put to death poorly for our food because of speed concerns.

    Just get the profit, get the money. goddam it get the money!!
    Again, many of the locations I've been through here in the US have decent safety programs. I'm uncomfortable naming them here, but I've been through literally 100's plants here in the US. Some indeed are armpits, but most practice a decent level of safety.

    I do see your point re globally. As a generalization, China is like USA, but in the 50's. And I'm sure Chile is behind too.

    Just get the profit, get the money. goddam it get the money!!

    You seem as cynical about profit making companies as I do about the government.

  10. #10
    SiriuslyLong is offline
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    "This is why you need to read something authoritative from an industry insider and not debate it with me. I learn this stuff because I care to know."

    I read analysts reports, prospectus's, balance sheet, income statements..........

    I'm calling it a day. Later.

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