Bank of America Prepares for a $10 Billion Hit Thanks to Financial Reform
Financial reform rules!
Bank of America took more than a few analysts and investors by surprise on its earnings call Friday by disclosing that the pending financial regulatory overhaul may cost the firm $10 billion or more.
Among the hits that the recently passed legislation promises are a drop in interchange fees, or the payments banks receive from credit card transactions, of as much as $2.3 billion.
Bank of America also says it expects to lose about $7 billion to $10 billion in goodwill for its global credit card service unit in the third quarter next year.
I'm reluctant to make any snarky comments like "They deserved it" or "Good, I hope it costs them another $100 billion" because in the end, it comes out of the consumer's pocket, not the bank's and the poor little consumer just can't take another hit.