Banks and oversized profits

Big banks like Chase are constantly complaining these days for the loss of revenue (profits) associated with new laws that curb (abusive) practices like automatic overdraft protection and debit card swipe fees.  They claim that all this new legislation that restricts their ability to make money is forcing them to raise fees on consumers in other ways.

I’m not buying it.

What is reallly happening here is that we have seen two decades of banking innovation.  Banking innovation is really just another term for banks discovering new and better ways to bilk their customers for more and more fees.  From lending practices that urged customers to borrow beyond their means, to pages of small-print rules that let them jack up the fees and rates when those same customers couldn’t afford to pay (i.e. the bank’s desired outcome).  Overdraft “protection” programs that customers didn’t want but got surprised with anyways, credit card and debit card swipe fees that bilked merchants, you name it, banks have added it on over the last two decades any way they could.

The biggest banks were/are the worst and most banks aren’t at all what banks were 20 or more years ago:  institutions that served their customers.

Now, the expectation of all this added fee income is a higher level of profitability that has set a new bar.

So of course banks are going to whine about their gravy train going away and look for other ways to get paid more money for providing less and worse service.  It makes perfect sense.

Unless you go back and reconsider what a bank is really meant to be.  If you did, you’d be leaving your big bank for a smaller one that exemplifies what banks are supposed to be like.

1 Comment

  • By Eric, March 17, 2011 @ 10:33 am

    I’ve been recently hosed in a way that’s pretty crafty by Chase! Apparently, my ex and I had an old account with WAMU and left it with a 600 dollar balance in 2006! I opened up a new chase bank checking account last month and they just recently cleaned out my new checking account without notice to offset the old WAMU balance. Very crafty way to collect on old debt, suggest people wanting to open an account with Chase check all their affiliations with these guys, needless to say I’m shutting down my account, what a joke and tacky for long term customer service!

Other Links to this Post

RSS feed for comments on this post. TrackBack URI

Leave a comment

WordPress Themes