Credit Suisse: Bank of America Getting Crushed by New Regulations

According to Credit Suisse analyst Moshe Orenbuch, Bank of America has been the hardest hit (by far) of the largest US banks due to new regulations which include Regulation E and the Durban Amendment.

According to Moshe, Bank of America has taken a $5.6 billion/year hit due to three new regulations (Durbin Amendment, Reg E, Increased FDIC premiums), far ahead of Wells Fargo and Co. ($3.17 billion) and JPMorgan Chase ($2.58 billion).

The Durbin Amendment, which limits the amount of money that banks can charge retailers for debit card "swipe fees", is estimated by Orenbuch to be costing Bank of America $2 billion per year in lost revenues. Wells Fargo ($1.54 billion) and JP Morgan Chase ($1.0 billion) have both taken 10 figure annual hits due to this amendment as well.

Reg E, "which requires banks to get customer consent before charging overdraft fees", is estimated to be costing Bank of America $3.3 billion per year in lost revenues. This compares to a $1.4 billion hit for Wells Fargo, and a $1.08 billion hit for JPMorgan Chase.

On top of all of that, increased FDIC (Federal Deposit Insurance Corporation) premiums are costing Bank of America a reported $300 million annually.

Bank of America tried to offset the estimated $5.6 billion/year loss in revenues by instituting a $5/month fee on their debit card holders, but they were eventually forced to back off after an angry backlash from the public.

Bank of America is currently trading at $5.23, which is right near its 52 week low.

Source: Forbes.com - Bank of America Hit Hardest by Fee Crackdown

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