Many Americans are outraged that the Bank of America, a recipient of multiple multi-billion taxpayer bailouts, will be charging a new $5 monthly fee for the use of debit cards. Other giant bailed out banks such as J.P. Morgan Chase and Wells Fargo will soon do the same. But brace yourself for they will have many more fees coming. Why?
Because most of them, despite big CEO bonuses and generous shareholder dividends are in poor shape. They have huge losses hidden among their Financial Statements for some of them haven't even begun to take the write-offs from foreclosed and soon to be foreclosed real estate holdings for example. It's no wonder Fed Chief Ben Bernanke is nervous and keeping interest rates near zero to savers, some of them retirees living on fixed incomes, so giant banks can make a lofty return on that money.
What is the big bank response? "The free market should decide whether that was a smart move by [Bank of America] or not," said Camden Fine, president of the Independent Community Bankers of America. "The president and politicians should stay out of it." What "free market?" Since the 2008-9 bailouts the giant banks are working together closer than ever. And they didn't hesitate to demand bailouts from the "president and politicians" when it suited their purposes. It is a "free market" only for them and they make big campaign contributions to keep it that way.
Whether you are an American or European, brace yourself for many more new fees, most of them not publicly announced. The combination of European and U.S. defaults and write-offs will trigger a need for them, along with demands for new bailouts. What can you do? Seek out smaller, well managed community banks and financial institutions that value your business and have never needed bailouts.
Dick
To learn more, please see "Partisan Fight Flares Over New Bank Fees," The Wall Street Journal http://online.wsj.com/article/SB10001424052970203791904576611280523269082.html?mod=googlenews_wsj
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