Wachovia Corp. reported record net quarterly income today due partly to windfall profits from its credit and debit card interchange fees. In the bank's own words: "24 percent revenue growth ... from strong increase in debit card interchange fees."
Bank of America reported more than a 20 percent increase from $1.2 billion dollars in the 3rd qtr of '04 to $1.5 billion this year. In just three months the bank's income from card income rose with lightening-fast speed. Year-to-date, BAC earned $4.2 billion, vs. $3.2 billion during the first 9 months last year - more than a 25% increase!
JP Morgan Chase reported on Wedneday that its noninterest revenue of $1.0 billion was up $156 million, or 18%. This increase was driven by higher charge volume resulting in increased interchange income.
While months ago, we didn't need forensic accounting experts to identify the windfall earnings from credit card interchange fees -- it was a line item on their statements - today we tried identifying Citigroup's results, but were unsuccessful after hours of reviewing their posted SEC filings. Seems that this profit center is becoming more sensitive and necessary to conceal due to the billions in potential liability from the credit card antitrust litigation.
In just a few weeks, as the new year begins, Bank of America's "integration" of MBNA will be completed. This means even less credit card competition and more opportunity to continue the bank's (alleged) collusive, price-fixing ways to control a $26 billion dollar annual trough of excessive profits. Where is Susan Molinari's group, (ACEC) Americans for Consumer Education and Competition when we need them? Oh yes, the ACEC gets "financial support from VISA USA" so we guess Americans will not be having them champion on behalf of retailers and consumers. The MBNA acquisition would have been the ideal opportunity for former congresswoman Molinari to engage her group to address the lessening competition within the banking / credit card industry.
[Click here to view entire press release].
