I posted my thoughts on where bank fees were headed in October, and now things are much clearer. Yes, the cost of banking has went up for banks and their customers. One thing that is under-reported; the fees imposed are a mere fraction of the costs that banks are absorbing under the huge regulatory burden placed upon us all by the Democrats and the Obama administration. Fees are never absorbed by a government or an industry. It is always passed on to the most basic subset: the consumer.
Here are a few quick points for all consumers looking for the right bank in the higher priced times and then a re-post of my October blog follows.
1) Move to a Community Bank. Community Banks are setting costs in a break even move against regulatory fees. Big Banks are using this opportunity to create new streams of revenue and profits for their coffers. Big Banks caused this mess and the ensuing burden on the system. Community banks never participated in the Wall Street debacle, and are only invested in the community and customers they serve.
2) The right bank will offer you options and products to minimize your cost of banking. Community Banks are bundling products and services and offering the lowest cost to deliver you everything you want at the lowest price point.
3) There has never been a free lunch. Nothing in the world has ever been free and banking is no exception. If we take a pragmatic approach to having instant and immediate access to the financial system of accounts, ATMs, debit cards, online systems and that iphone app, someone has to pay for that.
4) These regulations are another attempt to redistribute and socialize the world monetary system. However, everything for free for the masses has never worked throughout history and it didn't with Dodd-Frank Regulatory Reform either. Why do you think both sponsors of this heinous regulation retired and didn't re-run for Congress? If you are a capitalist, please remember to exercise your right to vote.
Here is my blog from October, 2011:
Bank of America announced this past week they will begin charging a monthly fee of $5 for customers to carry debit cards. Of course it was national news, and ran on all the networks. Regions Bank said they were doing a $3 fee and Citigroup was still evaluating their costs. Well folks, it's coming. Soon banks will be charging fees for all kinds of things that used to be free. Banks charge fees to cover the costs of services demanded by consumers. Do you think that 100,000 ATMs across America don't cost anything to develop and operate? I've joked recently that big banks may have a cover charge at the door! The cost of banking is going up. Thank you Barney Frank, the Democrat controlled Congress, and Mr. Obama. Regulatory reform has injected government controls into the free market banking system, all in the interests of saving the consumer money. When did government ever save the people money? The government has said, we can make the big bad banks charge you less. But, when one fee is capped or eliminated, other fees must take their place to financially support the system. Free checking will be next due to the elimination of overdraft fees. The government once again is attempting to make the Haves pay for the cost of serving the Have-Nots. It just isn't going to happen.
A free market system is best left to seek its own level on costs and fees for service. The American consumer has always been good at determining what are respectable costs and what are not. If the costs are too high, the consumer quits the service. The service must readjust to an acceptable level or fail. Just look at the backlash from Netflix raising fees for their service recently. The consumer effectively said no. Netflix has lost hundreds of thousands of customers overnight. It's too bad the government hasn't yet figured that out.
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