– Free Webinar: The “Rewards” of Keeping Debit Loyalty Programs Post- Durbin (Click here to register)
September 12, 2011
That’s what the Wall Street Journal was speculating Tuesday in an opinion piece.
Bank of America, the nation’s biggest bank, announced Monday that 30,000 jobs will be cut starting this year up until 2014. CEO Brian Moynihan said the move comes as part of the bank’s initiative to eliminate $5 billion annually in consumer business expenses.
“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,” states the Wall Street Journal.
The Wall Street Journal points in particular to the new debit interchange caps as a result of the Dodd-Frank bill’s Durbin amendment.
“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 newspaper continues. “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.”
Politicians should not turn a blind eye to potential perils when enacting regulations that will directly impact a company’s bottom line, WSJ adds. Click here to read the full Opinion piece.
Ask the Industry: Do you believe BoA’s recent job cuts are a result of Dodd-Frank regulations? Leave us your thoughts below.