Commentary: At least Bank of America's $5 debit card fee is easy to understand

The Charlotte ObserverOctober 10, 2011 

OK, if everyone else is going to zag, let me zig. We shouldn't be pounding Bank of America for this new $5 monthly debit card fee. We should be applauding them. And here's why:

Finally, BofA is trying to make money in a way we can understand.

It's a simple deal. If you want to pay for stuff without having to write a check or carry cash, it'll cost you the price of a Subway footlong every month. If you don't want to pay the fee, fine. Don't use the card. Or get an account somewhere else.

Banks used to do all their business in simple ways. You deposited your money with them. They loaned that money to other people. Then they made a profit off the interest. They charged you extra if you bounced a check, or if your balance got too low. But you understood that going in. You understood how banks worked.

Now nobody understands how banks work. Including a lot of bankers.

You still deposit your money, and they still loan it to other people. But you can also take out a mortgage or refinance your house. You can buy life insurance or open a health savings account. You can invest in stocks or bonds.

But high-level traders at some banks create even more complicated investments that they buy and sell and swap at video-game speed. And as our financial crisis has unspooled, it's become clear that a lot of these traders had no idea what they were buying and selling and swapping. They kept raising their hands at the auction, and in the end they paid billions of dollars for a painting of dogs playing poker.

For a week or two now there's been a protest in New York called Occupy Wall Street - Occupy Charlotte, the local version, brought out several hundred demonstrators Saturday. The whole thing has got a bit of a Deadhead vibe to it, and news outlets can't get a good grip on how to cover it, because the protesters don't have a specific agenda. The reason they don't is because our economic collapse didn't happen out on the streets; it happened on computers. When police turn fire hoses on civil rights workers, that brings things into focus. It's hard to grasp packets of data moving from one office to another, money being shifted around.

(Our money, by the way.)

We deserve clarity.

There's a great desire, especially among Democrats, to put more regulations on banks. BofA says one reason it's adding the $5 debit-card fee is because new rules limit how much it can make on per-swipe fees they had charged businesses. The bank also got rid of their overdraft fees for everyday debit-card purchases. (The bank estimates those two cuts add up to about $3 billion a year; if its 38.7 million debit-card customers pay $5 a month, that comes to about $2.3 billion a year.)

Bank of America, like all other businesses, should be able to make all the profit it can legally earn. But there are two big differences. One, we the people helped bail them out. Two, they're still holding onto a lot of our money.

So here's my proposal: BofA, or any other financial institution, can make money any way they desire. As long as they can explain it on one page. And as long as a group of bright ninth-graders can understand how it works.

Five bucks a month makes sense. It's all the nonsense we didn't know about that put such a hurt on us.

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