Did you recently get a letter from your bank saying that since you’re “such a valued customer,” your bank accounts are being changed to offer you the best service money can buy – your money?
The great new advantages of your new accounts: free checking accounts will now charge fees and accounts which already charge fees will see them increased.
Oh, and if your debit card costs more, banks say it’s all because new regulations are forcing them to, well, screw you.
From the Progress Report, Center for American Progress, 7 October 2011, here are 12 facts you need to know about the nation’s biggest banks:
• Bank profits are highest since before the recession: According to the Federal Deposit Insurance Corp (FDIC), bank profits in the first quarter of this year were “the best for the industry since the $36.8 billion earned in the second quarter of 2007.” JP Morgan Chase is currently pulling in record profits
• … even as the banks plan thousands of layoffs: Banks, including Bank of America, Barclays, Goldman Sachs and Credit Suisse, are planning to lay off tens of thousands of workers.
• Banks make nearly one-third of total corporate profits: The financial sector accounts for about 30 percent of total corporate profits, which is actually down from before the financial crisis, when they made closer to 40 percent.
• Since 2008, the biggest banks have gotten bigger: Due to the failure of small competitors and mergers facilitated during the 2008 crisis, the nation’s biggest banks — including Bank of America, JP Morgan Chase and Wells Fargo — are now bigger than they were pre-recession. Pre-crisis, the four biggest banks held 32 percent of total deposits; now they hold nearly 40 percent.
• The four biggest banks issue 50 percent of mortgages and 66 percent of credit cards: Bank of America, JP Morgan Chase, Wells Fargo and Citigroup issue one out of every two mortgages and nearly two out of every three credit cards in America.
• The 10 biggest banks hold 60 percent of bank assets: In the 1980s, the 10 biggest banks controlled 22 percent of total bank assets. Today, they control 60 percent.
• The six biggest banks hold assets equal to 63 percent of the country’s GDP: In 1995, the six biggest banks in the country held assets equal to about 17 percent of the country’s Gross Domestic Product (GDP). Now their assets equal 63 percent of GDP.
• The five biggest banks hold 95 percent of derivatives: Nearly the entire market in derivatives — the credit instruments that helped blow up some of the nation’s biggest banks as well as mega-insurer AIG — is dominated by just five firms: JP Morgan Chase, Goldman Sachs, Bank of America, Citibank and Wells Fargo.
• Banks cost households nearly $20 trillion in wealth: Almost $20 trillion in wealth was destroyed by the Great Recession, and total family wealth is still down “$12.8 trillion (in 2011 dollars) from June 2007 — its last peak.”
• Big banks don’t lend to small businesses: The New Rules Project notes that the country’s 20 biggest banks “devote only 18 percent of their commercial loan portfolios to small business.”
• Big banks paid 5,000 bonuses of at least $1 million in 2008: According to the New York Attorney General’s office, “nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008.”
• In the last few decades, regulations on the biggest banks have been systematically eliminated, while those banks engineered more and more ways to both rip off customers and turn ever-more complex trading instruments into ever-higher profits. It makes perfect sense, then, that a movement calling for an economy that works for everyone would center its efforts on an industry that exemplifies the opposite.
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Social Security now has a debit card available. Of course it is one of those that has the limit at whatever your payment is each month, but there are no fees for the most part. I may end up eating those words. Before I moved from California I always had a checking account that pay interest. My new account now charges me, which I find infuriating, and so I may be closing it soon. I don't really need them if I have to pay them.
And then, in all their arrogance, they and much of Washington wonder why citizens are occupying Wall Street.
"It is not the job of the protesters to draft legislation. That’s the job of the nation’s leaders, and (((if they had been doing it all along there might not be a need for these marches and rallies.))) Because they have not, the public airing of grievances is a legitimate and important end in itself."
-- sorry, I don't know how to use HTML tags in comments.
http://www.nytimes.com/2011/10/09/opinion/sunday/protesters-against-wall-street.html
And you'd think the Tea Party folks would be joining in, now wouldn't you? Wonderfully informative piece, BJ.
All the years Tiny was with the same bank that was finally bought by Bank Of America was free checking account. Then few months ago they started charging service fee each month. Tiny didn't sit still for that and made phone call to get it removed.
Another fast one they pulled one time was when she went inside the branch bank was that everyone had to have one of their cards. Tiny doesn't know if it's credit or debit because she had, and still has, no intention of ever using the card foisted on her with BOA.
Let them fail. Who cares if they do as long as we get our money out of them first. There's credit unions and community banks and they welcome your business.
Let the 1% know the 99% has no intention of letting them ride rough shod over the masses of the people. Washington and Wall Street aren't the only places people are protesting.
A So. FL a couple got ripped by BOA re: their mortgage. BOA was ordered to repay, but never did write the check. The couple's attorney rented a truck that he and the couple took to the bank, started carrying out the furniture etc. selling it in front of the bank. BOA was seeing how it is to be forced out of your house.
The difference was, the couple's mortgage was paid in full when all foreclosure against them was started and they wanted their money back. It didn't take a whole lot of selling off BOA's assets before the couple left the bank with a check in their hands.
As the old axiom goes: There's more than one way to skin a cat.
BJ, thanks for keeping those facts posted to everyone's attention.
Frodo is a capitalist, but he is also extremely pragmatic. Why, he asks, should we expect those who invest in a bank to have the same objectives as one who invests in a company that makes software, for example? The investor in a software company should rightly expect to get a maximum return on his investment. If he makes a million, then good for him. A bank however is insured by all of us, and the amount of money it lends is limited by the strength of the borrower. Obviously, he who invests in a bank should expect to make good on his investment, but certainly not in as "risky" an environment as the software investor.
Frodo says, limit the profitability of banks to 15%, and pay any profit percentage above that to the government as an "excess profits tax." The investor gets a good, safe return. The banker is encouraged to mix quality and volume in the loans he makes. The bank, again, becomes part of the community, and not a swirling Charybdis, sucking the consumer dry.
I am not under the anti-corporation crowd umbrella and have argued they provide goods and services we both need and want, not to mention jobs. The commercial sector is a vital part of our economy.
The Hobbit knows I do not understand the intricacies of high- stakes investing, but the “excess profits tax” sounds good to me, particularly on a business which is federally insured.
I do understand that excess and greed brought down the Holy Roman Empire. Excess like $37,000 backpacks “flying off the shelves” and greed as in the facts in this post.
Pass around an “excess profits tax” and a snowball to the Republican on Capitol Hill and see which one lasts longer.
I also understand what is being passed along to the consumer. I am paying a dollar on my water bill each month for the cleaning up of chemical spills. I am paying this because the federal government mandated that the municipalities clean up these spills, but did not provide them with the funds to do so. Why am I paying for this and not the culprit in the spill? Some things I just don’t understand.
And, have you checked the taxes and fees on your phone bill lately?
Thanks, everyone, for your comments!
BJ
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