John Stumpf goes boldly where no man has gone before. He announces widespread price increases in the mainstream media.
“I can’t guarantee that we won’t pass on some of those costs,” Stumpf, 56, said in an interview at his San Francisco office. “We’ll try to tighten our belt and absorb some of the costs of compliance, but some costs may change and customers might pay for their financial services in new ways.”
Stumpf’s comments add to evidence that new rules mean new expenses for consumers as banks make up for lost revenue and increased costs. JPMorgan Chase & Co. CEO Jamie Dimon said July 15 the legislation may translate into higher fees and credit- card rates, and Bank of America Corp.’s Brian T. Moynihan told shareholders a day later he’s looking for ways to soften the impact on annual revenue, which the lender said could be $2.3 billion.
Wells Fargo, with the biggest U.S. branch network, is already passing on costs by charging for checking accounts and raising interest rates on credit cards and loans, said Richard Bove, a banking analyst at Rochdale Securities LLC. The bank ended free checking last month by adding a $5 monthly fee for customers who don’t meet certain conditions.
“This bank does not intend to sit there and get nailed,” said Bove,
I think that last comment really says it all. The bank does not intend to get nailed. Bove captures the spirit of unconscious capitalism. It is about who makes the most money and who gets nailed.
There is nothing in here, no hints of ways that the banks can contribute innovation and come up with new product bundles to meet the needs of consumers (citizens), who have a new austerity ethic brought on largely by uncertainties about the future and strong doubts about the safety of either their primary asset, their home, or the financial markets which provide dwindling and volatile returns.
Only an oligarch, with so dominant a market position, can so boldly announce that they intend to stick it to the little guy, the commoner, what I will describe in future posts as the Third Estate.