Friday, March 23, 2012


In the golden age of banking, somewhere between 1980 and 2007, profits soared despite the fact banks weren't lending as much and interest rates were moderate. Banks were making billions of dollars from bounced check fees, over draft fees, ATM fees and numerous other fees and charges imposed on the average customer, many without their knowledge. The fees bore no relation to actual costs to the banks. Their amount was based on what the banks could get away with in any given market. When you add all the gambling they were doing with customer money and the end of restrictions on their activities, banks were making money hand over fist...until the bubble burst.

Now, due to the Dodd/Frank legislation, and the creation of a new consumer rights agency, banks have seen new rules imposed on everything from overdraft fees to the fee charged to businesses for handling credit card transactions. Instead of a profit margin of 15%-20%, banks find themselves back to the days when they might make an 8% profit and be thrilled. They aren't thrilled, and are determined to find a way to make you pay to bring those profits back.

In a move reminiscent in its stupidity to the introduction of classic Coke, Bank of America tried to introduce a fee on customers who want to access their money. The public outcry was so strong; they folded like a house of cards. However, lately the industry is trying again. Wells Fargo, and others, want to charge a fee if you don't keep a high enough balance in your checking account. They would like a fee for online banking and a fee if you only have one account with their bank. Some banks want to raise ATM fees and others want to impose fees for actually doing your banking in person. (Yes, I know that contradicts online fees, but they didn't seem to care.)

There are so many places where it feels like we have no control anymore and have to accept whatever is foisted upon us by corporate America. Look at the airlines...there is a fee for every aspect of air travel. From luggage to legroom, to printing a boarding pass, there is a fee to be paid. Recently, the new consumer agency wants to require airlines to list all fees when advertising the price of a flight. The airlines are screaming bloody murder at the thought of such transparency and how it will allow consumers to compare and contrast their fees against each other. The truth is, however, if you are going to fly, you have to accept this ridiculous fee explosion. It's the same with so many other areas of our lives. Do you want to use a state or national pay the fees which are multiplying like rabbits. Want to add on to your numerous fees for everything from permits to inspections. Want to drive from here to there? Wait until you discover more and more toll roads and the fees they will require. You pay a fee for different garbage license your pet or car...set up a business and the fees are non-stop. I do have some good news for you. You can tell the banks where to stick their fees because you don't have to bank at their institutions.

You are free to take your money and put it in a credit union or community bank and avoid most of the fees. The credit union my family belongs to has no charge for a checking account, no minimum balance requirement, no ATM fees (and if some other bank charges you, my credit union will reimburse the fee) They don't charge you to issue travelers checks or to bank online. They are not unique as this is true for most credit unions and community banks.

The only real question is why would anyone bank at Wells Fargo, B of A or any of the big banks who only see you as a resource they can plunder to increase their bottom line while delivering mediocre to insulting customer service? Why hasn't there been a tsunami of customers swamping credit unions etc. as new customers? You have the power to vote with your feet and send a message to these corporate cretins. While you have to fly sometimes, can't easily change cities or state, and have to grin and bear so many fees (taxes) imposed on you from afar...when it comes to banking, you have a plethora of choices and can reward those institutions who value you enough as a customer not to gouge you every time you turn around.
There can be little sympathy for anyone still banking with one of the big banks. Yes, they may have lots of ATMs, but other than that, they have no regard for you nor do they value your patronage. If you still bank at a bank which sees you as their own personal ATM...if you haven't moved to a bank which values your business...if you continue to reward those banks even as they thumb their noses at deserve what you get.

We don't have a lot of power or control in large parts of our lives, but when it comes to our money, we have ultimate freedom. Why would anyone not exercise that freedom and tell Wells and the rest, "...hell no, we will go". What do you think?


  1. Good post Bernie. As a practical matter, no one should stay with one of the giant banks because they offer numerous, conventiently located ATMs. You CAN get the same thing with the credit unions. The credit unions have networked and thus offer free ATM use at any of the credit unions, regardless of which specific one you belong to.

    Bye-bye Wells Fargo. I left you YEARS ago..


  2. pedantic point: unless i am mistaken, coke's stupidity was the introduction of NEW coke. classic coke was damage control.

    otherwise, a good post.

    on another side note: americans really need to rethink their money system. most countries do not use checks and we pay our bills with ease. for example, where i live, any bill: internet, gas, electric, cell or land line phone, water, car or home or life insurance, taxes, mortgage, can be paid in cash at any convenience store anywhere in the country. there are no service charges for these services. i have never paid an overdraft fee or fee of any kind for using money in my bank account. most credit cards have no fees. you only pay interest if you carry a balance.

    this also means that there are no paychecks. payment is either in cash or bank transfer; your choice. again, there are no fees (or delays) for this service. payday is payday, not when the bank releases your money.

    a story about paying bills late. a few years ago i let my phone bill sit on my desk and kept ignoring it even though it was a couple of weeks overdue. one day, i tried to make a phone call and my phone was dead. oh no. i picked up the bill walked to the nearest convenience store about five minutes away. i paid the bill and walked home. by the time i got back the phone was turned on again. no late penalty, no waiting weeks for someone to come out to my house, no egregious deposit.

  3. I am in Britain and we have been dumbed down so we do not revolt and protest because most do not understand what is put on them,also benefits(means tested) keep everyone quiet and we think its out of our control and the Polititions will do what they want anyway.I do think we have the power to alter things but who wants to listen or bother when they can manage on handouts.The class society is alive and kicking big style here the news is selective and fed to us like their pets thats how dumb we are here.!!!!