Bankers plan to find ways to make up the money they will lose as a result of new restrictions on fees set up by federal financial reform measures. Elizabeth Warren, who will run the agency charged with looking after consumer interests as they interact with financial firms, will have her work cut out for her.

Bank of America (NYSE: BAC) plans to phase in new fees for consumers which could total as much as $4.3 billion a year, according to the FT. These will be “workarounds” of the new federal regulations, and will probably be cleverly enough constructed that Washington will have no say over them.

The move by BAC and other large money center banks could add tens of billions worth of new charges for customers. It will show the powerlessness of Washington to enact all-encompassing rules, if the new methods to charge clients work.

Banks, like almost every other business that works under any federal regulations, are like water seeping through cracks in the rock. The financial reform bill may have passed, and it may include several hundred pages of provisions, but federal organizations will have to implement the new plans, and that will take years of work. There is nothing new about that observation. What is surprising is the extent to which large banks have already begun trying to regain the money that they have lost because of the new law.

Financial reform may end up doing little for the consumer. although it is likely to change the face of institutional banking. Firms such as Goldman Sachs Group (NYSE: GS) will divest their profitable proprietary trading desks. Goldman is in a relatively few businesses compared to Bank of America, which means that its chances of finding new methods to make money in the face of reform are limited.

Banks with huge numbers of customers will nickel and dime them to death. These financial firms are already well-practiced in that art. Many people don’t bother reading the fine print in the agreements  they have with their banks. That print is likely to get smaller so that banks can squeeze money from what the federal government hoped would be a new rock.

Douglas A. McIntyre

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