The Abominable Snowman has competition--the Abominable Banks

Banks just can’t help themselves from behaving abominably. Like sitting on $2 trillion in cash. If banks would start giving credit, American businesses would rebound tomorrow. But the banking industry owns Congress. And a Congress that can’t stand being in the same room with itself is hardly prepared to get more aggressive with banks. If change is to occur, it won’t come from within.


While my heart goes out to these kids living in parks, as winter sets in, but rallies like “Occupy Wallstreet” have no effect. President Obama couldn’t get the banks to meet for a cappuccino at Starbucks.

The US Government likes big banks because they are easier to monitor than small neighborhood banks. Yet the downside, as Adam Smith foretold years ago, is predictable. When power is concentrated in few hands, they get together and conspire to keep competition at bay.

Here’s an example–Chase and Bank of America have raised fees on simple services, like using your debit card. Bank of America, CitiGroup and JP Morgan–after the big bailout–were supposed to lower fees for consumers, not raise them. But that didn’t happen. In 2009 the average checking account holder paid $327 in annual fees. That is three times what folks paid two decades ago. Many of the fees are those “ha ha ha, we got you” fees are overdraft charges.

But many customers are fed up and have taken their business elsewhere. This is good news for local banks and credit unions–they picked up 650,000 new accounts in the third quarter of 2011.

Remember when the Administration said we had to bail out the big banks because they were too big to fail? Yeah. When you have so much influence and wealth concentrated in such a small group, you get “Too Big To Not Screw People,” or “Too Much Influence in Congress.”

The banking industry’s influence in this country has no peer. I know Chase got $100.7 billion in bailout money from the U.S. taxpayers. Chase can borrow from the Federal Reserve at almost zero interest, yet refuses to modify mortgage rates for 354,000 American homeowners. Chase holds $19.5 billion worth of foreclosed homes--the greatest number of any among Chase’s mega-bank colleagues. Chase was caught recently overcharging 4,500 military members on their mortgages. Chase’s own boss, Jamie Dimon, got $20.8 million in pay in 2010. That's about 1000 times what the average bank teller earns.

Berken’s Tip–move your money to a local credit union. Public Service Credit Union, Academy Banks (it doesn’t do credit checks) are decent. (I have never liked Bellco and how they treat my clients). As to a locally - owned bank, none better than Bank of Denver.

Cheers

Steve