Excessive regulations may be at the heart of Bank of America layoffs

The Wall Street journal reported this week that financial over-regulations may be too much for the industry and could have lead to Bank of America’s announcement that it will cut 30,000 jobs by 2014.

“After loose monetary policy had combined with insane housing policy to create a financial crisis, the Democrats who ran Washington in 2009 and 2010 enacted myriad new rules that had nothing to do with easy money or housing,” the Wall Street Journal reports.

The WSJ described the Durbin Amendment as a way to force banks to charge major retailers such as Wal-Mart less money for operating electronic payment systems.

The Durbin Amendment will reduce Bank of America’s debit card revenues by $475 million in this year’s fourth quarter alone.

The Wall Street Journal also explained the negative impact of the 2009 CARD Act, which limited the ability of banks to increase rates on delinquent borrows and to implement fees on unprofitable customers.

“As Washington encouraged card issuers to be more selective in advancing credit and to demand higher rates when they do, interest rates on card customers predictably increased relative to other types of lending in the months after the law took effect,” the Wall Street journal reports.

Politicians should take into account consequences as they reduce the profitability of employers.

“Mr. Obama proposed last week to spend some $450 billion more in outlays or tax credits to create more jobs, but it would have cost a lot less to save these 30,000,” according to the Wall Street Journal.

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