Friday, June 18, 2010

Checking Chumps - Congress Manages Banks

Hollering about "fairness," Democrats vowed to punish U.S. banks by passing new laws to micromanage their businesses. As a result, free checking may soon be dead. So who's really paying for all that "fairness"? Bank of America and other big banks plan to charge monthly "maintenance fees" on checking accounts, according to the Wall Street Journal, due to a spate of recent new congressional regulations on banks. It's not surprising, given the extent of do-gooderism in Congress, which has insisted it knows better than banks themselves how to run their businesses and treat their customers. Acting from what they imagine are the interests of the little guy, their recent legislative moves — as well as others on the way — have effectively halted how banks charge overdraft fees on consumers who bounce checks and how interest rates are calculated on high-risk credit cards. What they didn't pay any attention to was the fact that those fees enabled banks to offset the $300 or so it costs to maintain each checking account at a bank. So now everyone pays to replace what had otherwise been penalty-based income on the individual acts of an irresponsible few. Previously, consumers could control their fees based on how well they managed their checkbooks. The better they managed, the less they paid. Now, they'll just pay, whether they're responsible or not. Call it the socialization of fees...more

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