Your Chickens have come Home to Roost.

The news of PNC Bank buying the banking assets of RBC Bank in the United States should come as no surprise to anyone who has been keeping up with the banking business lately. You can expect additional sales of smaller banks to larger banks and the resulting layoffs to continue for some time in the future. The reason is simple, the recently passed financial regulation bill is forcing banks to find additional ways to make money since many avenues were taken away by the new law. The Dodd-Frank financial regulation bill supported and signed by President Obama is also designed to push financial institutions to get larger, which will make it easier for the federal government to oversee them.

Many of you supported this law which restricted banks from charging fees for overdrafts among other things that cut down on places banks could make profits. But in that case, like most cases, the banks were asking people who cost the bank more to pay more. Many people love to hate banks, but without banks the financial system in this country could not function. In many ways banks are a regulated monopoly of the federal government. I actually approve of many regulations since we the taxpayers back the deposits with FDIC insurance. However beyond the requirement that banks keep an appropriate amount of capital to insure protection of depositers and taxpayers there should be less regulation. That is why we have bank holding companies which basically make the interest of shareholders seperate from depositers and taxpayers.

Unfortunately the federal government, via congresspeople and presidential administrations, tend to want to use banks for their personal agendas. The results are usually bad. In the case of the recent subprime debacle the results were catastropic. Banks had a hand in that mess, but the impetus for the problems began with President Clinton, then added in President Bush, Congressperson Barney Frank, and Congressperson Chris Dodd as the leading problem makers. All of these people wanted everyone who could even come close to buying to home to have one and pushed banks to issue mortgages to almost every possible homeowner. To make the deal work the feds used Fannie Mae and Freddic Mac, the two quasi-government agencies, to insure the mortgages so the banks could legally issue them. Of course we now know too many people got mortgages and the result was a breakdown of the financial system via the vastly overbuild home market.

The recent law also limits debit card fees for banks to 12 cents per transaction. Congress just last week seeing trouble ahead tried to end that restriction only to see the change go down in defeat. Note that Senator Chuck Schumer, not exactly a raging conservative, backed the change. Being a New York Senator he had been told by the bankers in NY of the problems down the road from this one regulation in the Dodd-Frank bill. Mainly that small banks can not survive from the smaller fee and banks will have to merge to make money. Trust me there is more problems to come from this bill.

Besides the fact restricting bank fees by regulation is just not good capitalism, frankly what it does it make the fee NO LOWER than 12 cents for those banks who actually might have wanted to lower the fee to attract customers. Minimum anything is like giving licence to those who want to make money and kill off competitors.

All this is to say you the voter wanted this bill and voted in 2012 for this much heavier hand of regulation. Congress and President Obama obiliged you with the new bill and regulations. Of course as usual the federal government took the regulations too far. We never learn, since we have been down this path just a few years ago and did not then. In this case to quote a recent Chicago preacher "your chickens have come home to roost". They are roosting with additional job cuts and soon to be slower economy for all you already looking jobs. Now many of you will blame the banks and corportations, but in this case the finger should be pointed towards you the voter. These companies, unlike the government, must make money to survive. They must make enough profit to attract shareholders to give them the capital to grow and prosper. Welcome to your new financial world since you helped create it.