Wells Fargo Chief Executive Officer John Stumpf suddenly discovers capitalism in a bid to halt federal caps on debit card fees. Bzzt. Fail. You don’t get to be a full-time fascist operation — government-sponsored enterprise in polite speak — and then turn around and bitch about the deal you struck to stay rich. And out of jail.
The banksters do not like that in return for a bailout and a get-out-of-jail-free card the feds are clamping down on what can only be described as the banks’ license to tax their customers. Instead of essentially an ad valorem debit card levy based on ability to pay, fees would be capped at 12 cents per transaction. Stumpf and the banksters are screaming that they’d lose $12b. in essentially free money as a result. It is easy to see why.
A $75 transaction now coughs up about .85 cents in fees, ostensibly paid by the merchant but we know that is just recouped from consumers. With a 12 cent cap, over three-quarters of Stumpf revenue is gone. And the bigger the transaction the more he loses as the current fee system averages out to about 1.14 percent per transaction, according to Bloomberg. That means for $300 transactions the banksters pocket over $3 — virtually all of it profit. It does not cost the banks any additional expense to process a $300 electronic transaction than it does a $3 one — the increased take is all based on ability to pay.
Ability to pay is a tenet of progressive taxation — that the wealthy should pay more because they can pay more. And it is beyond ironic that the banksters are about to lose this quasi-governmental power as the lines between private financial institutions and the state dissolve into incoherence.
Bonus Canard: “What’s next? Will the government require car dealers to sell a new vehicle for $5,000 or grocers a gallon of milk for 50 cents?” Stumpf wails to shareholders. Stumpf evidently has never heard of Govt Motors’ Chevy Volt and I’m reasonably certain that any grocer who put a “milk” label on a carton of goat piss and sold to the public would be in federal PMIA prison right now.
With all the PR folks WFC employs, you’d think they could do better.
