…you should go out of business. I’ve meant to get to this, so in Internet years, this news is like a gajillion years ago. Anyway, one of the galling things about the bank bailout is that, even though in many cases the taxpayers basically own the banks, nothing is being done about various forms of usury, one which is banks’ effort to maximize overdraft fees. Here’s an example of what I mean:
Naturally, banks are trying to push back:
Some experts warn that a sharp reduction in overdraft fees could put weakened financial institutions out of business.
Michael Moebs, an economist who advises banks and credit unions, said Ms. Maloney’s legislation would effectively kill overdraft services, causing an estimated 1,000 banks and 2,000 credit unions to fold within two years. That is because 45 percent of the nation’s banks and credit unions collect more from overdraft services than they make in profits, he said.
“Will they be able to replace it with another fee?” Mr. Moebs said. “Not immediately and not soon enough.”
They will certainly try. For instance, some banks have said they might slap a monthly fee of between $10 to $20 on every free checking account. At the moment, people who pay overdraft fees help subsidize the free accounts of those who do not.
I call bullshit. There was a time, admittedly so long ago that liberals freely roamed the political landscape, when banks made profits and didn’t have to have to gouge customers. In fact, they made profits, and debit cards hadn’t even been invented yet (terrifying, isn’t it, kids?). How did they do this?
Well, their loan portfolios didn’t suck ass. If a bank is making more money by essentially offering payday loans (via overcharge fees) than they are by loaning money that they receive from the Fed at very little cost*, then they should go out of business. FDIC will backstop the deposits, and the good loans will be acquired by healthy banks.
AAAIEEEE!!! TEH SOCIALISMZ!!!
*The rest of us would be so lucky to get those rates.