Friday, December 30, 2011

This Week in Bank Failures

To back up their various court cases against Bank of New York Mellon, government entities reportedly have inside information from the bank, including a detailed description of the methodology the bank used to generate phantom currency transactions. The bank is accused of distorting currency transactions in order to charge state pension funds billions of dollars in extra fees.

Verizon Wireless seemed to be taking a page from Bank of America’s book. It was at the end of the third quarter that Bank of America announced new transaction fees that helped to inspire Bank Transfer Day. Exactly three months later, Verizon Wireless announced a new bill-paying transaction fee. The move sparked a similar kind of uproar, along with an FCC investigation, and the backlash led to a quick reversal from Verizon. Verizon’s move came at the same time that lawmakers in the United Kingdom are working on new rules to curb the same kind of transaction fee abuses.