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Dodd-Frank causes Bank of America to cut 30,000 jobs and raise debit card fees

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From the Wall Street Journal.

Excerpt:

What is the cost of overregulation? Bank of America appears to have provided part of the answer by announcing yesterday that the nation’s largest bank will cut 30,000 jobs between now and 2014. CEO Brian Moynihan said the bank’s plan is to slash $5 billion in annual expenses from its consumer businesses.

Mr. Moynihan didn’t say this, but we will: These layoffs are part of the bill for the last two years of Washington’s financial rule-writing. 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.

Take the amendment that Illinois Democrat and Senator Dick Durbin (with the help of 17 Senate Republicans) attached to last year’s Dodd-Frank financial law. Mr. Durbin’s amendment instructed the Federal Reserve to limit the amount of “swipe fees” that banks can charge merchants when customers use debit cards.

How exactly does forcing banks to charge Wal-Mart less money for operating an electronic payment system prevent the next financial crisis? Readers may wait a long time for a satisfactory answer, but the cost of this Dodd-Frank directive is straightforward.

The Fed dutifully ordered banks to cut their fees almost in half. Bank of America disclosed in its most recent quarterly report that this change will reduce the bank’s debit-card revenues by $475 million in just the fourth quarter of this year. The new rules take effect on October 1, so BofA seems to have sensible timing as it begins to shed workers from a consumer business that has become suddenly less profitable by federal edict.

Make that the latest federal edict. In 2009, when a comprehensive overhaul of financial regulation was still a gleam in Barney Frank’s eye, President Obama signed the CARD Act into law. It limited the ability of banks to increase rates on delinquent borrowers and to charge 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.

Restricting bank profits on a particular product may have obvious populist appeal, but politicians shouldn’t be surprised if banks decide that such consumer credit operations aren’t good businesses and can function with fewer employees. Add in the various federal programs aimed at extracting penalties for this or that mortgage-foreclosure error and it’s understandable that a bank would have trouble forecasting growth to justify its current work force.

But that’s not all. The Dodd-Frank regulation also caused Bank of America to raise fees on debit cards to $5 a month ($60 a year).

Excerpt:

Throwing their weight around at the height of the banking crisis, House Financial Services Chairman Barney Frank of Massachusetts and Sen. Chris Dodd of Connecticut vowed to stick it to banks. They blamed them for the mess to cover up the fact that they forced banks to lend to favored constituencies who could not repay.

The two Democrats pushed through the much-vaunted Wall Street Reform and Consumer Protection Act, which President Obama signed and touted as one of the signature accomplishments of his presidency.

That act, which included a micromanaging amendment on fees, carried a $2.9 billion implementation cost for that alone over five years, according to the Government Accountability Office.

It was nothing but the same old pandering to special interests. Named after Illinois Democratic Sen. Dick Durbin, the amendment limited fees that banks can collect from sellers when their customers make debit card purchases — cutting 44 cent fees to 21 cents.

That little bomb is now why battered Bank of America has no choice but to impose a $5 monthly fee — $60 a year — to consumers to make up for lost revenue.

The “economics of offering a debit card have changed with recent regulations,” a bank spokeswoman told ABC News Friday.

BofA says it stands to lose $2 billion from the arbitrary Durbin price-fixing amendment and now has no choice but to make up for the lost revenue some other way.

Now that consumers will be stuck with that fee, they can thank Dodd, Frank and Obama for that special little spike in inflation tailored just for them.

Other banks, by the way, might follow. And like banks, consumers may respond in a way that is logical to their interests, too.

If there is one person who is to blame for this recession, it’s Barney Frank. Chris Dodd isn’t far behind. Who elected these people, and do they understand economics? I think not.

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Fast and Furious assault weapons seized from drug cartel enforcer’s home

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From the L.A. Times.

Excerpt:

High-powered assault weapons illegally purchased under the ATF’s Fast and Furious program in Phoenix ended up in a home belonging to the purported top Sinaloa cartel enforcer in Ciudad Juarez, Mexico, whose organization was terrorizing that city with the worst violence in the Mexican drug wars.

In all, 100 assault weapons acquired under Fast and Furious were transported 350 miles from Phoenix to El Paso, making that West Texas city a central hub for gun traffickers. Forty of the weapons made it across the border and into the arsenal of Jose Antonio Torres Marrufo, a feared cartel leader in Ciudad Juarez, according to federal court records and trace documents from the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The smugglers’ tactics — quickly moving the weapons far from ATF agents in southern Arizona, where it had been assumed they would circulate — vividly demonstrate that what had been viewed as a local problem was much larger. Six other Fast and Furious guns destined for El Paso were recovered in Columbus, N.M.

“These Fast and Furious guns were going to Sinaloans, and they are killing everyone down there,” said one knowledgeable U.S. government source, who asked for anonymity because of the ongoing investigations. “But that’s only how many we know came through Texas. Hundreds more had to get through.”

Torres Marrufo, also known as “the Jaguar,” has been identified by U.S. authorities as the enforcer for Sinaloa cartel chieftain Joaquin “Chapo” Guzman. The Fast and Furious weapons were found at one of Torres Marrufo’s homes.

I want to see how the media tries to help the Obama administration out of this mess. Be sure and share these stories on Facebook, especially the ones from CBS News, the L.A. Times, etc.

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What’s behind the explosion of sexual activity among college students?

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Consider this article about the problem first, from the Wall Street Journal.

Excerpt:

The two most serious ethical challenges college students face are binge drinking and the culture of hooking up.

Alcohol-related accidents are the leading cause of death for young adults aged 17-24. Students who engage in binge drinking (about two in five) are 25 times more likely to do things like miss class, fall behind in school work, engage in unplanned sexual activity, and get in trouble with the law. They also cause trouble for other students, who are subjected to physical and sexual assault, suffer property damage and interrupted sleep, and end up babysitting problem drinkers.

Hooking up is getting to be as common as drinking. Sociologist W. Bradford Wilcox, who heads the National Marriage Project at the University of Virginia, says that in various studies, 40%-64% of college students report doing it.

The effects are not all fun. Rates of depression reach 20% for young women who have had two or more sexual partners in the last year, almost double the rate for women who have had none. Sexually active young men do more poorly than abstainers in their academic work. And as we have always admonished our own children, sex on these terms is destructive of love and marriage.

Here is one simple step colleges can take to reduce both binge drinking and hooking up: Go back to single-sex residences.

I know it’s countercultural. More than 90% of college housing is now co-ed. But Christopher Kaczor at Loyola Marymount points to a surprising number of studies showing that students in co-ed dorms (41.5%) report weekly binge drinking more than twice as often as students in single-sex housing (17.6%). Similarly, students in co-ed housing are more likely (55.7%) than students in single-sex dorms (36.8%) to have had a sexual partner in the last year—and more than twice as likely to have had three or more.

Now this is where things get interesting. The religious conservative people don’t like students drinking, hooking up, and getting depressed. Who could possibly be in favor of hurting women?

Well, consider this article in the College Fix.

Excerpt:

Now John Banzhaf, a law professor at George Washington University, is suing CUA for discrimination.

Banzhaf filed a complaint with the Washington D.C. Human Rights Office alleging that the university had violated D.C.’s Human Rights Act. CUA lawyers met with Banzhaf at the Human Rights Office on September 15 to defend the university’s decision.

Banzhaf, who has a history of using lawsuits to fight against what he sees as discrimination, compared the university’s decision to separate students by sex to separating them by religion or race.  He specifically linked the single-sex dorm policy to the “separate but equal” racial policy in place in the U.S. before civil rights movement.

He also told CUA’s student newspaper, The Tower, that the decision is “the same as saying that since Muslims and Jews don’t get along we should force them to live apart.”

What’s behind the push to make women drink and hook-up with men? Feminism.

What feminism says, in practice, is that men have no special duties when compared to women. To say that men have anything special that they are responsible for is to be “sexist”. Therefore, men and women have to be lumped together from kindergarten to college graduation so that they can be identical in every way. Anything less would be “discrimination”.

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