Bank of America CEO: We Have a "Right to Make a Profit"

What kind of world do we live in when people get upset that businesses exist to make profits?

Did people wake up one day and say 'wait a minute, businesses make money and I don't like that'. Did Karl Marx just crawl out of his grave and turn on a mind control device? Threads like this make me feel like I'm on crazy pills.

Originally posted by Dbriefed
What kind of world do we live in when people get upset that businesses exist to make profits?

Did people wake up one day and say 'wait a minute, businesses make money and I don't like that'. Did Karl Marx just crawl out of his grave and turn on a mind control device? Threads like this make me feel like I'm on crazy pills.

No one is saying they don't exist to make profit, but they don't have an inherent right to make profit, they have to earn it. And I think the real problem here is not that the BoA has increased their fees, it's that they are now refusing to close accounts and people are beginning to protest.

reply to post by Dbriefed


making profit is fine, unless it is forced, ie: i must pay and have no choice.

the other thing that gets my back up with some 'business' is they do not seem concerned about how much money people have left after paying forced fees, almost as if they think people in general do not have a right to also make profit, and in some cases even have enough money to live. they seem to think that only they as a company/business have a right to make profit, and totally ignore or do not care about the fact they are cutting into everybody elses profit margins by bringing in a forced fee.

most business does not force people into spending money therefore it is not those that are at fault.

If you don't bank there, why are you even getting upset about this?

reply to post by wardk28


because the rest all follow suit, this should be obvious by now. when gas prices increases with one company the rest follow shortly after. etc etc.

if mcdonalds got away with charging an entrance fee of 10p/cents into their property and people paid it and accepted it, how long do you think it would take for the rest of the shops/restraunts or any other form of place where customers enter to buy things to follow suit?

reply to post by Resonant


Yeah he has a right to make a profit. Except his profit is aimed at those of the middle and lower class. That $5 fee is not for the wealthy. How about charging money for business accounts? How about charging service fees for using the merchant window?

These fees are directed at obtaining $5 a month from every working American. Yes the rich are included on it, but do we think the rich are going to miss $5? Nope. However, you take $5 from me and that might be my lunch one day. When corporations nickle and dime people the only ones who can sustain that are the wealthy. A home safe and a gun seems like the least expensive option now days.

The reason why Bank of America needs to charge a $5 monthly fee for debit card use is because of the patently ridiculous Durbin Amendment. At the behest of big retailers like Wal-Mart, Durbin's Amendment caps the amount of profit that the bank can earn on each debit swipe. This is interference in the private marketplace to the nth degree. Banks stand to lose billions in profit this year alone due to this legislation.
Funny enough, down South, many regional banks already charge a debit card usage fee, but we don't hear anything about this in the press. In fact, many credit cards have an annual fee that is charged - oftentimes $100 annually or more, depending on the type of card. This is really no different. If you like the card, pay the fee in one lump sum, or pay-as-you-go on a monthly basis. Nothing prevents someone from paying cash instead of using a debit card. Debit cards aren't a mandatory requirement in today's world - Cash works just as well.
And, yes, banks do have an obligation to their shareholders to earn a profit. Banks are businesses, too. The government has no right to step in and cap profits in the private marketplace. If you owned a business, how would you like it if the government capped the profits you could earn?
And, the stupid part about this is that the retailers benefited enormously from the usage of debit and credit cards. The average consumer is apt to spend as much as 30% more in purchasing of retail goods when they use a credit/debit card versus paying for cash. The consumer is much, much more conservative at the retail counter when he has to shell out cold hard cash. Retailers should be ashamed that they lobbied the Federal Government for this legislation.
Oh, and don't expect retail prices to drop anytime soon because retailers are now making more money when their clients use debit cards. No, that profit will go right into the bottom line of the retailer, not the consumer. Why don't you picket Wal-Mart? These retailers are the only reason why the banks are charging this new debit card fee.

Is this for the investors our the investor it damn sure is not for the account holders.

Buffett Invests $5 Billion in Bank of America

link

reply to post by lifeform11

making profit is fine, unless it is forced, ie: i must pay and have no choice.

For a minute I was thinking you were talking about Obamacare. Anyone care to tell me how it is leagl for the government to dictate what I must purchase?

reply to post by mugger


well i for one would not know anything about that. in the u.k. we pay national insurance, which is taken out of your earnings, this is forced, but the money goes to a good cause and protects me from paying huge medical bills if anything were to happen, it gives me free hospital treatment.

it does not go into the hands of people just doing it for the sake of a profit that will not benefit anybody other than the greedy pockets that came up with the idea.

its the same with tax, yes it is forced, but it is to maintain and improve facilites i need and use, like roads, school education etc etc. again not just going into the greedy pockets that came up with the idea.

the only problem i have with those two things is we currently do not have people in power who are spending it wisely or running things to a standard people can be satisfied with.

If you don't like them charging you $5 a month to use THEIR debit card....don't use it.

There are other options.

I wonder how many people are going to pull their money out of Bank of America thanks to that change. Given the reported outages on their site, it seems entirely possible many of the personal accounts are getting out of there.

I know I would cancel my account there under these circumstances. I don't question their right to make a profit, provided they don't receive government subsidies or special treatment, but I sure as hell don't blame everyone who leaves them. Last I checked, giving a bank your money was you giving them money to spend.

I can't help but blame this attitude on just how much leverage and how little liquidity banks are required to hold. It's as it deposits are secondary to their business, and that might be the most frightening thing of all.

Originally posted by Vikus
No they don't have the right to make a profit.

Any corporation that needs special treatment and bailout money from the government is a failure.

FAILURE CORPORATIONS HAVE NO RIGHT TO PROFITS

They need to fail and make room for people and industry that can succeed.

reply to post by JIMC5499


Exactly, yes. BOA has the right to charge you to use their services. If you don't want to pay fees for using banks, make your own bank business and see how quickly you will start charging fees for the services you offer. Because prices will increase, people's intellect will vary and you too will grow wary of letting people off with free checking accounts.... While back in the day the mere use of your money was good enough to invest and turn a profit for banks but the economy is hard for everyone it seems....

You would have to assume that senior management of a $3.2 Trillion mega-bank made a calculated decision as to the number of potential clients that they would lose from this move. Moynihan is no idiot - He graduated with a law degree from Notre Dame. He's rightsizing the bank to be profitable in the long-term, and shedding unprofitable parts of the bank left and right. The major challenge he faces is now dealing with the legacy issues associated with the Countrywide Mortgage acquisition.

Naturally, the bank wants a full business relationship with high value clientele - The more products and services that the client utilizes from the bank, the more profitable the relationship in terms of fee income. Banks want long-term profits, and this may be one way to weed the wheat from the chaff.

Large banks, such as Bank of America, reward customers that do a large portion of their business with the bank. That's why the debit fee is eliminated for clients with high average deposits, or ancillary products such as a credit card or mortgage relationship with the bank. The bank simply doesn't want the unprofitable clients that generate no fee income to the bank.

Frankly, if you cannot afford $5 per month for a debit card - $60 per year - you probably don't belong banking with a major league mega-bank. Large banks are focused on bottom-line profits, and if $60 per year kills you, you are probably not the type of client that the bank wants to do business with anyways. That doesn't mean the bank doesn't care about you as a consumer - It's just a simple business and mathematical reality that the bank has to be profitable to stay in business. At least Bank of America is being honest and transparent about its fees up front.

Business people understand that banks need to make a profit. The majority of the people complaining about this move are liberal politicians appealing to populist causes, and those non-business-oriented consumers that naively believe that all banking services should be free. Business people know that there is overhead, infrastructure, payroll, and countless other expenses that the bank has to maintain to stay in business. The mistake that banks have made historically is giving everything away for free - Free online banking, free ATM's, free debit cards, etc.

Originally posted by GringoViejo
I don't see anything wrong with what he said. Whether we like it or not, its true. I'm not saying banks are our friends, but the point of starting a company is to make money.

That is what you have been brainwashed to think.

The real reason you should be starting a company is to produce for the people around you. To give them something that can help them get through the day. This would be the incentive for them to do the same.

The idea of making a profit is bogus. Because the so-called return to, in this case, shareholders and customers is so minimal in relations to what the banks make, that he's tossing nothing but excuses around.

Banks are not your friends... they are not a service institution. You have to realize that they are greedy companies who believe it's ok to charge huge interests when they "help" you with a loan or similar, and at the same time hold back with the interest when you lend them 100 dollars or more on your savings account.
What do you get? 1-2% at most? Do you have any idea how much the bank is profiting?

There is an unequal balance here, and that can never be justified with what ever smoke screen they might toss at us or which PD's they might buy off (look into New York).

So please... understand what it is he's saying, but use his words to fuel our own cause.

We live in new times. It's not about big business. It's not about who can make the most, if that money isn't put back into the community anyways, if it isn't being used to hire 2-3 more people for every million they profit.

IT IS ABOUT GETTING ALONG AS HUMANS. Don't let yourself be lured into their world. They thrive on wars and fear. This is NOT what you want. Try to love the people around you, instead of competing with them. Try to help them, instead of stepping across them when they fall.

The end of big corps is near... a new beginning is coming, and when it does, we better be prepared to have a voice ready for those who think they are suited to "lead" us.

Businesses have no inherent Right to make any profit what so ever. They do have the privilege of attempting to be profitable but no Right to it. If said business has a Right to make a profit, then everyone has the Right to wealth, unlimited health care and unending happiness. We all know that we do not receive these as a Right but at best an opportunity to achieve them.

Since BoA thinks it has a Right to make a profit, then all customers have the Right too BoA's profits by charging BoA interest on the use of their monies at a rate they deem fit and not what BoA thinks it should give or charge for its use. The money does not belong to BoA, thus it is a loan too BoA for its use.

The CEO of BoA seems to have forgotten that without happy customers, he has no bank and no job. Investors and shareholders are not customers, they are gamblers betting that the price of shares and their investment will increase. There are no guarantees that the price of shares or that the investment will increase.

Try convincing people to give/lend you money for your use and then tell them that for the privilege of letting you use their money you will charge them a fee and that you have the Right to make a profit from their monies. In turn, those that gave/lend you the money to use have no Right too the proceeds thereof. Why do you think usury was punishable by death if it was not for the simple fact that it is theft. Now if you want to give/lend BoA your money so that they can rob you of it, then be my guest.

Banks do have a legitimate place in society as long as they are doing business in a legitimate manor. The banks however do not do legitimate business. They charge their customer for the use of the customers own monies [not the banks] and fees to access said same. P.T. Barnum had it right; "there's a sucker born every minute and two to take him".

Originally posted by Dbriefed
What kind of world do we live in when people get upset that businesses exist to make profits?

Did people wake up one day and say 'wait a minute, businesses make money and I don't like that'. Did Karl Marx just crawl out of his grave and turn on a mind control device? Threads like this make me feel like I'm on crazy pills.

What kind of world do we live in when CEO's think of only short-term profits? There is NOTHING wrong with corporations deciding to do something which might make them less money in the short-term but more money in the long-term.

Ford did this when he decided to pay his employees enough money so they could buy a Ford. It's smart business which tends to benefit shareholders. This short-term focus tends to boost the CEO's bonus at the expense of long-term profits. This is unethical and should be stopped.

Banks can't cry about regulations when they benefit everyday from bailouts. If it wasn't for the FDIC after the great drepression or the current bailouts, there wouldn't be a banking system.

reply to post by Resonant
Yes Bank of America you have a right to make a profit but not a killing. We bailed out the banks remember, oh how fast humans forget. Whose bailing out all the families losing their homes,and jobs. The only thing I can say is Oh Almighty please show the way.

I don't know what the ceos bonus was last year but I would bet at 5 dollars a pop nearly all of the charges go to him and his VP just to cover the bonuses they are expecting this year.

reply to post by JustXeno
What's really disgusting is I'm on unemployment and I have to pay fees on my funds that are put on a debit card. This country is ridiculous our founding fathers are turning in their graves now.