10-06-2011, 01:44 PM
I was listening to NPR yesterday, and they had some flack for the banking lobby on claiming the new fees (he was defending BofA's $5/month Debit Card Fee) were forced on them by The Government. His argument was that those nasty Washington types limited the transaction fee to $0.24 to appease the retail lobby.
The interviewer was ill-prepared, though. The last I'd looked, the banks' cost per transaction was more like $0.07. But the real kicker are the clauses in Dodd/Frank that prevents banks from allowing the debit charge on a $2 latte to rack up $30 in fees - or to use the largest charge to do the overage, then assess fees on each of the smaller ones.
The bottom line is that the mega-banks (Citi, BofA, PNC, ...) no longer are content making money on the difference between what the pay in interest (almost zero) and the interest earned from loans. Those fees are their cash stream.
I switched to a small, local bank 10 years ago and never looked back.
The interviewer was ill-prepared, though. The last I'd looked, the banks' cost per transaction was more like $0.07. But the real kicker are the clauses in Dodd/Frank that prevents banks from allowing the debit charge on a $2 latte to rack up $30 in fees - or to use the largest charge to do the overage, then assess fees on each of the smaller ones.
The bottom line is that the mega-banks (Citi, BofA, PNC, ...) no longer are content making money on the difference between what the pay in interest (almost zero) and the interest earned from loans. Those fees are their cash stream.
I switched to a small, local bank 10 years ago and never looked back.