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Is Consumer Anger Towards Banks Misguided?

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    Anton Schutz of Mendon Capital Advisors on consumers leaving banks due to fees.

  • Duration 4:23
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More about that.

Taxpayers may be on the hook for Fannie Mae and Freddie Mac but its banking phase that has them have them up in arms.

Where -- JD power & Associates nearly 10% of customers changed banks last year due to anger over phase.

And anger my next guest says is misguided joining me is Anton -- a minute capital advisors.

He runs the -- financial services fund and the financial industry's five.

And and time and this just comes yesterday Wall Street Journal reports that Bank of America is looking away to.

Tax fees on to checking accounts and again why is -- why shouldn't the customers being -- Well they should be mad but they're anger is should be -- congress should be -- Dick Durbin who attacked this amendment.

To the Dodd-Frank act which is essentially costing BankAmerica two billion dollars.

You know -- you had a conversation -- AT&T earlier charging people for usage.

-- -- providing the pipes the systems for people use their credit or debit cards have merchants merchants get paid comes out of the checking account.

The big banks provided all the structure and service made easier for the merchants made easier for the consumers.

And all of a sudden Germans -- hey wait a second next year limit on what you can charge.

Banks are looking at the service they provide -- wait a second.

We don't make any money on a whole lot of our consumers people who do business -- why we gonna keep doing business -- -- -- keep doing business with them we need to get compensated for doing that.

Nobody gets mad -- anybody else providing a service getting paid for but also -- people expect.

Thanks to provide services are -- that actually cost them money.

And you know it's really unfortunate because people should be angry because that money that is not.

Going to the bank's coffers is going to the merchants because of merchants have not reduce the price is they're charging the consumers.

And Dick Durbin was quoted at an industry conference saying.

-- merchants look what I've done for you well it's great he's done -- for the merchants the banks are getting paid consumers are mad getting ripped off.

And a lot of these rules have been a really disenfranchised.

Consumers from the entire banking system the credit card act was very very much the same.

Anton we we I didn't quite of that statistic from JD power about almost 10% of bank customers -- accounts last year.

Do they have anywhere to go though I it -- group which -- the banks aren't the greatest disadvantage of losing customers potentially.

Well you know I I think we've got actually turn that whole comment around -- The big banks will certainly lose customers but those customers are profitable for the banks actually cost -- banks money.

Credit unions there's there's thousands of them out there the small community banks that want those accounts they may not make any money from having those customers either.

Because by the way you know BankAmerica wants to charge people -- wants to charge people it has no other business relationship -- it.

Democratic Party have a mortgage you -- -- -- Merrill Lynch.

You have you know some some more substantial deposit account you're not gonna get charged -- the bank makes money for doing business with you when.

But that's the way business is supposed to work in oh by the way the government's trying to mandate banks don't get paid.

You just talk about Fannie and Freddie would -- money they've lost the government's done a great job running them.

When you look at Bank of America BAC that stock has popped up 47 and her sit here today.

Overall -- financials select sector spdr is gained 14%.

And time you.

Predicted this on this very show that there would be a shift of money and of these -- do you think -- can continue do you think it's a little long in the -- here.

Well I mean your viewers -- the market being long in the tooth and obviously a lot of the market move is made up simply -- once stock apple.

And certainly some of the banks is really had some great performance this year.

They were killed its home watch over the last couple of years and they actually -- a fair bit of earnings power ability to return things that.

It -- in a short term from a trader's perspective maybe -- long in the tooth but I.

I think we're fundamental long term perspective using -- -- are still very very cheap.

In regards to what they can you know do in terms returning capital buying back stock.

And eventually growing earnings.

I just came back from McCain to -- bank conference in Boston and I'll tell -- banks are feeling pretty good the feeling pretty good about long growth.

It is out there.

Credit is continues to get better and better so the environment is really shifted -- and I think that there's a lot of upside out there.

It's on great to see you put it all perspective -- -- -- sets of -- capital advisors thanks anti.

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