Bank of America says it will lose billions on financial reform
Many assumed that banks that hold the bulk of American credit card debt would see their profits decline thanks to the new financial reforms, but one major lender said just how much the laws will cost it.
In its second-quarter earnings call, Bank of America told investors and analysts alike that the new financial overhaul will cost it as much as $10 billion in revenues. According to the New York Times, the bank said it will take the biggest hit on the bill’s mandated reduction in interchange fees, which it gets every time a consumer uses a Bank of America-branded debit or credit card for a transaction. The losses from that alone could cost the company up to $2.3 billion.
The report said that Bank of America, one of the nation’s largest credit card lenders, is the first such institution to announce just how badly it will be affected by the bill. JPMorgan Chase said prior to the bill’s passage that it was unsure just how much it would lose.
The reform bill also added the Consumer Financial Protection Bureau, which will oversee rates and fees charged by lenders on everything from credit card debt to mortgages.