Yesterday, I wrote about Bank of America's chutzpah in seeking to add a $5 monthly fee for use of the Bank of America debit card. Sadly, BofA wasn't the only big bank contemplating this fee; there is evidence of a possible illegal collusion of big banks to charge customers new fees, just for the convenience of using their debit cards to spend their own money.
What was the reason for the new fees? The big banks cited "diminished profits," because now they can't charge exorbitant rates to merchants whose customers use those debit cards, rates than end up costing the consumer about $230 annually in passed-on price increases.
Let's look a little closer at these so-called diminished profits.
Bank of America reported a $6.2 billion profit for the third quarter as gains from the sale of assets like its stake in the China Construction Bank and positive accounting changes outweighed weaker results in its trading business and continued losses in its huge mortgage portfolio.[…]
The other major commercial banks that have reported earnings in recent days posted profits of around $4 billion each. Both Citigroup and JPMorgan Chase benefited from a $1.9 billion increase from the accounting change applied to the declining value of their company debt, posting profits of $3.8 billion and $4.3 billion, respectively. Wells Fargo had record earnings of $4.1 billion despite a 6 percent drop in revenue.
Banks are doing fine folks.