With banks, bigger seems not to be better. The list of fines, settlements without admitting guilt, and the closing and takeover have become part of the financial world of banks and banking. This past week, announcements were made by a few of the 'Big Boys' of banking, the trillion dollar big boys, that they will be paying fines after a brief investigation by the Consumer Finance Board(Federal agency).
How about $800 millions? Can the average tax payer digest the number? No. Really, it is incomprehensible to the human mind. Maybe a computer can accept the number, but you and I cannot. If one spent $1000/day, how long would it take to spend $800000000.? It would take 2,191 YEARS! Yes, years.
So, as the phrase goes, it would take a long time. So, what happened? Typical activities that were largely convenient for retail users- Zelle payments/transfers systems, etc. Used by a large segment of young techies and youngsters in general. A user application that allowed account holders to transfer funds from their bank accounts to another user with the required application on their phones. Sounds good; and it worked. And then----hackers and scammers arrived in spades. People lost money. Money that was being held by banks. Money the banks said was safe. Money the banks said they would make good in case of fraud. And then they didn't.
Over the course of just a few years, thousands upon thousands of customers were victims of fraud and the banks ignored their loses. Thank the Consumer Finance Account Board for their intercession. And now the bill has come due.
Bank of America will pay as per its own announcement: $800 millions. They call it part of the 'business'. I call it too big to fail is too B-I-G. With a new Baboon in the White House, the big banks think times will change and the party will restart on January 20, 2025, again.
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