BankThink

Several large banks are starting to charge customers a fee each month they use a debit card for purchases. The worst offender is Bank of America, which is implementing a $5 monthly fee.

PayPal Inc. urges its customers to "verify" their accounts by linking a checking account or credit card - a process that also makes the accounts more valuable to hackers.

Receiving Wide Coverage ..."Close to Faltering": That was Federal Reserve chairman Ben Bernanke's description of the economy in Congressional testimony yesterday. Such blunt talk from a Fed chairman is a calculated risk, according to the Journal. "Bernanke wants to spur action in Washington, but he doesn't want to undermine fragile household and business confidence with gloomy talk." Specifically, he called for fiscal moves that would reduce the deficit in the long term, without resorting to growth-squelching austerity measures in the short term. Wall Street Journal, Financial Times, New York Times, Washington Post

A bug in Android smartphones made by HTC exposes users' personal data to any application that requests it.

When the profits and losses of the debit card unit suffer as regulation clips revenues, the banks increase fees, discouraging debit card usage. Any pretense to customer focus goes out the window.

In hinting that the consumer bureau should look at B of A's $5 debit card fee, Obama has solidified bankers' worst fears about the CFPB.

Word that a banking pool had returned its money to investors prompted our assistant managing editor to take a second look at the state of banking. The answers are discomforting.

All of the bank-bashing I've witnessed in recent months has me reflecting on one of my favorite Buffett lines. I'm talking about Jimmy, not Warren.

Receiving Wide Coverage ...Not So Dexterous: The European debt crisis has a new poster child: Dexia. The French- and Belgian-based bank, which specializes in lending to municipalities on the continent, held an emergency board meeting Monday to discuss a possible break-up after Moody's put its credit rating on review for possible downgrade. The news of Dexia's woes, as well as Greece's continued fiscal strains, contributed to a global stock selloff. Under the plan being discussed, Dexia's shaky assets (which also include Greek and Italian sovereign debt) would be placed in a "bad bank," whose obligations could be guaranteed by the French and Belgian governments. Those governments indicated they would stand behind Dexia, which they partly own. Although hardly a household name in the United States, Dexia is a significant player in our municipal bond market, as a guarantor for a type of short-term debt that is rolled over daily and weekly. If investors refuse to float the debt when it comes due, Dexia is obliged to purchase much of it, and in such an event it has the right to demand from these municipal clients a much higher interest rate and accelerated payoff. "Such a worst-case scenario is equivalent to an adjustable-rate mortgage on a house where the borrower suddenly faces a huge balloon payment," the Journal says; the test will come later this week when many debt issues are due for remarketing. Dexia also relies on short-term funding, though less so than when it was first bailed out in 2008. Hmm… short-term funding to finance long-term financing, with exposure to European sovereigns and U.S. munis? What could go right? The FT's Lex sums up the situation nicely: "If any bank epitomises the eurozone's bank-sovereign conundrum, it is Dexia." Wall Street Journal, Financial Times

Understanding the management of Bank of America is now next to impossible. What makes them want to anger 50 plus million solid retail customers while their entire operation is in damage control? Five million customers from the bank I headed joined this group when B of A acquired it in 1992.