Hugh McColl Jr., the retired Bank of America Corp. chief, says a new financial reform bill will likely produce unintended consequences, but it's too early to know the final outcome.
"Until you see the regulations and rules, you can't understand it," he told the Observer on Monday, referring to details still to be filled in by regulators.
In Friday's second-quarter earnings report, Charlotte-based Bank of America sketched out the potential impact of the legislation, including a possible 80 percent reduction in debit card revenue. Executives are now working to retool the bank's consumer offerings in a way that helps make up lost income while keeping customers in the fold.
"I think the Bank of America has been very forthcoming in talking about what they're going to do," McColl said. "I don't know how you can get more candid than they have been. I'm very impressed with their response and where the retail bank is going. They understand to make more money you need to give better service."
McColl said regulators already have the most important tool: capital requirements that have the effect of reigning in excessive risk-taking. In the wake of the financial crisis, consumers, businesses and the nation now face a lengthy process of paying down debt, he said.
"The deleveraging process will be long," McColl said. "If it were too short, it would be catastrophic."
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