Sen. Dick Durbin (D-Ill.) has taken his rant against Bank of America to the Senate floor, encouraging the bank's customers to switch banks, a move that confuses some financial experts.
“Bank of America customers, vote with your feet, get the heck out of that bank,” Durbin said on the Senate floor, according to the Associated Press. “Find yourself a bank or credit union that won’t gouge you for $5 a month and still will give you a debit card that you can use every single day. What Bank of America has done is an outrage.”
Durbin had a significant role in last year’s Dodd-Frank financial reform law that drastically reduced major U.S. banks’ ability to generate profits. Not only did he support provisions that imposed enormous penalties and fees on larger financial institutions, but he also championed a cap on interchange fees collected by large banks, WashingtonTimes.com reports.
Bank of America recently announced it would charge its debit card users a $5 monthly fee in order to remain profitable amid an abundance of new regulations, a move Durbin called unfair.
“They are overcharging their own customers, once again, twice as much as they should if they just want to cover the hidden fees they had in the past,” Durbin said on the Senate floor, WashingtonTimes.com reports. “That is unfair to consumers, it is unfair to the customers, and it is unfair to do it in this tough economy, when a lot of Bank of America's customers across America are struggling to get by.”
Durbin said that the bank’s customers should switch to another bank that does not charge such high fees.
“So now Dick Durbin — architect of at least part of this mess — makes matters worse by effectively encouraging a run on BoA by its depositors,” Terry Ponick, an experienced investor, wrote, WashingtonTimes.com reports.“What is the point of this irresponsible vindictiveness when the entire financial system, hamstrung now by the European debacle, is hanging by a slender thread?”
According to Ponick, it’s difficult to determine what Durbin is getting at with his anti-bank rant considering that Durbin was a major supporter of Dodd-Frank’s reserve requirements, which are a major reason that banks are sitting on massive reserves rather than loaning them out.
“A better idea than the vindictive Dodd-Frank remedy for that problem would have been to simply re-impose certain provisions of Glass-Steagall,” Ponick wrote, referring to legislation from the Roosevelt Administration that limited banks to specific areas of business, according to the WashingtonTimes.com. “But it’s probably too late, now.”