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by Troutman Sanders CFPB Team
September 13, 2011. Bank of America announced on September 12, 2011 that it plans to cut up to
30,000 jobs over the next two years. While Bank of America was not overly
direct in stating the reasons for the cuts, today's Wall Street Journal's Opinion page did not equivocate,
saying "these layoffs are part of the bill for the last two years of
Washington's financial rule-writing." Accusing Democrats of enacting a "myriad
new rules that had nothing to do with easy money or housing" the WSJ pointed to
a loss of $475 million in debit card revenue as just one area where new
regulations have slashed at banks' profitability.
As the article makes clear, while efforts to restrict the
profitability of big banks "may have obvious populist appeal," there should be
very little surprise when a bank decides to cut operations, eliminating
employees and jobs, in those areas that are no longer profitable due to
regulations. "Add in the various federal programs aimed at extracting penalties
for this or that mortgage-foreclosure error and it's understandable that a bank
would have trouble forecasting growth to justify its current work force."
While the writer acknowledges that Bank of
America also is suffering from a number of self-inflicted wounds he also
calls out elected officials saying that, with the clear effects on banking
employees, "politicians should not be allowed to pretend that there are no
consequences when they deliberately reduce the profitability of employers."
Read more at Consumer Financial Protection Bureau
Report by Troutman Sanders LLP.
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