Pamela Powers Hannley, a progressive voice for Arizona
Earlier this year, Ariana Huffington and other liberals started a nationwide campaign urging Americans to move their money from mega-banks like Citibank and Bank of America to local banks and credit unions. Quoting my original Move your money, pay cash, and buy local article:
Frustrated Americans are bankrolling bank bailouts and funding bonus checks for CEOs with poor performance appraisals, but what can we do about it? How can we voice our anger and frustration? The federal government thinks these banks are “too big to fail.”
Arianna Huffington and her cohorts have given us a way to demonstrate our frustrations. If these non-performing banks are “too big to fail,” make them smaller by moving our money out. The Move Your Money campaign began in December 2009 and has taken off through social media and the Internet.
Last summer, the Democratically-controlled Congress passed financial reform legislation, which prevents banks from fleecing us with exorbitant fees, ends debit card transaction fees, and adds regulations to prevent the “too-big-to-fail” bank scenario, which destroyed our economy and prompted President George Bush and his administration to bail them out in 2008. This financial reform was just the tip of the iceberg on what could be done to create some laws that will prevent Wall Street gamblers wreaking havoc on our economy– again.
Since some of their fees have now been capped, mega-banks are coming up with other ways to steal our money. Here is an excerpt from today’s Arizona Daily Star. [Emphasis added.]
The days when you could walk into a bank branch and open an account with no charges and no strings attached appear to be over. Now you have to jump through some hoops – keep a high balance, use direct deposit or swipe your debit card several times a month.
One new account at Bank of America charges $8.95 per month if you want to bank with a teller or get a paper statement.
Almost all of the largest U.S. banks are either already making free checking much more difficult to get or expected to do so soon, with fees on even basic banking services.
It’s happening because a raft of new laws enacted in the past year, including the financial overhaul package, have led to an acute shrinking of revenue for the banks. So they are scraping together money however they can.
Bank of America, which does business with half the households in America, [move your money, people!] announced a dramatic shift Tuesday in how it does business with customers. One key change: Free checking, a mainstay of American banking in recent years, will be nearly unheard of.
“I’ve seen more regulation in last 30 months than in last 30 years,” said Robert Hammer, CEO of RK Hammer, a bank advisory firm. “The bottom line for banks is shifting enormously, swiftly and deeply, and they’re not going to sit by twiddling their thumbs. They’re going to change.”
In the last year, lawmakers in Washington have passed a range of new laws aimed at protecting bank customers from harsh fees, like the $35 charged to some Bank of America customers who overdrew their account by buying something small like a Starbucks latte.
These and other fees were extremely lucrative. According to financial services firm Sandler O’Neill, they made up 12 percent of Bank of America’s revenue. On Tuesday, the bank took a $10.4 billion charge to its third-quarter earnings because the new regulations limit fees the bank can collect when retailers accept debit cards.
Bank of America CEO Brian Moynihan acknowledged in a conference call that overdraft fees were generating a lot of income. But the bank was also losing customers who were often taken aback by the high hidden fees. [Duh.]
Boo hoo, such a sad story from the CEO of Bank of America. Maybe he could have a yard sale or get a second job or retire and enjoy his multi-million dollar, golden-parachute bonus.
I urge you all to move your money (preferably to a credit union), pay cash, and buy local. These big corporations aren’t doing us any favors. In fact, they’re flooding this election with cash (thanks to the Roberts Court) in order to keep Republican puppets– like John “savings-and-loan-crisis” McCain in office– and bring in others like him.
For more stories about big money and the growing wealth disparity in the US, check out these posts.
The ramifications of wealth disparity: Robert Reich gets it