Banks Are Laughing All the Way to Us

You may not have noticed, but after US stock markets dropped significantly in the second week of October, guess which sector was doing so well that its shares pulled the market back up? Yup, the financial companies. The ones that have benefitted so much in the post-recession marketplace and pulled so much extra cash from the Republican corporate tax cut. $13 billion-worth of tax savings just in the first half of 2018!

It wasn’t enough for banking community to get the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA) passed this spring, gutting more than a few consumer protections in the recession-driven 2010 Dodd-Frank financial reform statute. Trump called the anti-consumer EGRRCPA “a big deal for our country” even as 85 consumer advocacy groups said will “stack the deck in favor of banks of all sizes.”

“The new law, signed by Trump in May, [raises the] financial threshold for many of Dodd-Frank’s rules to apply… [It] also leaves consumers with fewer safeguards, such as preempting tougher state rules in some cases and limiting consumers’ right to sue.” David Lazarus writing for the October 12^th Los Angeles Times. But banks still want more!

As their fees and profits escalate, banks still pursue further deregulation. We learned after the immense financial damage generated by the last Great Recession that banks’ cowboy attitudes combined with a government willingness to bail out large failing financial institutions – unchecked by common-sense limits – will take unnecessary risks and squeeze every penny out of their customers. Well, the current “whatever big business wants” Congressional/Trumpian cabal is unlearning those lessons. With the relaxing of regulatory restrictions, banks are joyfully charging consumers seemingly whatever the banks want. And if history’s lesson is any indicator, “here we go again.”

 “The American Bankers Assn. has been running TV commercials patting various lawmakers on the back for supporting ‘much-needed regulatory relief to help banks better serve their customers and communities.’… What’s striking, though, is how the banking industry has been busily spinning a myth about being crippled by overregulation, and how banks are yearning to breathe free of rules that prevent them from funding small businesses and investing in local communities.

“A report [in the second week of October] from Bankrate.com highlights the deceptive nature of the industry’s violin playing:

“Banks are now charging a record $4.68 on average for each out-of-network ATM transaction, up 36% over the last decade.

“The Los Angeles average fee is $4.44. The highest ATM fee nationwide is Detroit’s $5.28.

“The average overdraft fee is $33.23, down a smidge from a year earlier, but 54% higher than two decades ago.

“The Federal Reserve may be raising interest rates, but the average interest-bearing checking account pays out a mere 0.07% annually.

“Only 8% of interest checking accounts require no monthly service fee or minimum balance. The most common such service fee is $25 a month.

“All that nickel-and-diming adds up. In fact, banks have never made more money. Ever.

“After posting a record $56 billion in profit in the first quarter, banks stuffed their pockets even more in the second quarter with a new profit record of $60.2 billion, marking a 25% increase from a year before, according to the Federal Deposit Insurance Corp…

“‘It’s simply not credible that banks are crippled by regulation and need regulatory relief,’ said Sally Greenberg, executive director of the National Consumers League. ‘They are making money hand over fist on fees of all sorts — ATMs, overdrafts, minimum balances.’… She called bank regulation ‘absolutely critical to ensuring that the banking sector doesn’t take risks with other people’s money, something this industry has consistently done when the regulations are loosened.’” David Lazarus.

We have a Congress joining the President in a massive “government gone rogue” feeding frenzy where they just are tripping all over each other to give big business unwarranted but massive gifts. Forget about needed government investments in infrastructure, education and research. Give that money to the richest elements in America, even if that means adding trillions to the deficit. The biggest losers? The vast, vast majority of Americans who will pay for this folly through the nose… until it bleeds profusely.

I’m Peter Dekom, and it doesn’t take a rocket scientist to tell you that these trends will not end well.