Last year, I opined that the new federal consumer credit card protection law would result in higher fees and charges from the Banks, designed to increase revenue in the face of the act's more restrictive consumer protection provisions.
That prediction is now confirmed.
I got a phone call last night from a trusted source, well-placed in the banking industry, who goes by the code name "Deepak N.
Debt" in order to protect his multi-billion dollar pension.
"Deep" reports overhearing the following conversation between shakers and movers at a recent company public relations confab.
Shaker: It's rough, you know.
All that heat about arriving in D.
C.
by private jet.
Mover: Not as rough as flying commercial.
Shaker: True enough.
I'm just concerned that the public might see these higher credit card fees we're rolling out and the costlier checking accounts, as a money grab.
You know, like the bail-out.
Mover: Don't be a lunatic.
These new consumer protection laws are going to cost us north of $50 billion annually.
That's $50 billion each and every year.
You want to explain losing that kind of swag to our shareholders.
Shaker: Well, um..
..
Mover: Me neither.
Listen.
This isn't about a money grab.
It's about covering higher operational costs and significantly enhanced transactional risks.
Shaker: You think they'll buy that? Mover: Guaranteed.
They have no idea what it means.
Shaker: I suppose more disclosure does mean more paper, more printing, more postage...
Mover: There you go! And those things cost money.
Look at it this way: If we have to tell consumers exactly what they're buying, shouldn't they have to pay for it? Shaker: They should.
It's added value!