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Why Banks Want Your Checks to Bounce
Back in the day, writing bad checks used to be a criminal offense. Now, it's a profit center. Banks make an eye-popping $17.5 billion a year by encouraging us to overdraw our checking accounts. Banks hold on to deposits and clear checks in a way that ensures the maximum number of bounces, regardless of when the checks were actually cashed. They let us use ATM and debit cards even when there's no money in our accounts. Then they charge us $34 a pop for the favor. Some banks even charge extra fees for every day an account is in the red, turning overdraft "protection" into a form of loansharking, with interest rates that would make Tony Soprano blush. Except when banks do it, it's all legal.
Tomorrow, the U.S. House Financial Services Committee will vote on a bill that might change some of this. Among other things, H.R. 946 would prohibit banks from manipulating check-clearing to enhance overdraft fees and require banks to warn customers that their accounts are overdrawn before allowing them to make a purchase with a debit card or make an ATM withdrawal. Seems sensible enough, but expect a major fight over this one, given the money involved. You can read more about overdraft abuses here.
Banks already create money out of thin air. ATM fees and bounced check fees are a drop in the bucket compared to what's really going on with banks and the Fed (an organization of private bankers, allowed to dictate monetary policy for the government)
Money that people and businesses OWE to banks is counted as "assets".
With the increased "assets" represented by the money they don't really have in the vault or in real reserves, they are legally allowed to loan out MORE money, and thereby create still greater "assets".
It's a brilliant Ponzi Scheme, and NO, you can't blame it all on Bush and the Republicans!
It's much older than that.
If and when it ever collapses, the "Great Depression" will look like it was a GREAT time to be alive.
The neo-con talk radio and shill mill has focused America on cutting taxes that, in principle, help everyone, while ignoring bank fees, which only help the banks and their shareholders. America's tax cuts have merely been channeled to the banks and credit companies. Everyone needs to ask themselves: how much do I pay in taxes (state, federal, sales) and how much do I pay bankers (mortgage interest, credit card interest, fees and all the rest) I'd rather pay taxes, use no credit, and pay nothing to the banks. Every argument used against paying taxes could be applied toward paying banks.
slanted tom said: "The neo-con talk radio and shill mill has focused America on cutting taxes..."
Tom, you really think that a majority of Americans actually LISTEN to those annoying, boring stiffs?
If they do, and if they're absorbing what comes out of their tinny little radio speakers, then the neocons ought to be winning elections by landslide margins.
Maybe Americans just DO think their tax burden is too high, that government is funding too many stupid, costly and useless things at the citizens' expense, and talk radio is not so much a driving force in that thinking as you assume.
God, don't I miss the old "Proxmire Golden Fleece" award!
GVC - help me understand what is part of the Ponzi scheme? Should Banks not charge ANYTHING for their services? ATMs allow you to get cash practically anytime. If you don't want to pay the fee, go to the banking center and withdraw the money. Should the bank loan you whatever amount of money you want and you can use it for free and pay it back whenever you feel like? What do you consider fair?
"They let us use ATM and debit cards even when there's no money in our accounts. " I'm tired of people whining about fees for things that can be avoided if they take some personal responsibility. If you don't want overdraft fees, balance your checkbook and don't overdraw your account. Don't expect the Bank to be your babysitter. If you don't want to pay credit card interest, don't charge more than you can pay back in a month.
I suggest renting a DVD called "Maxed Out" a real eye opener...something else to think about MBNA (Bank Of America) was the second largest contributer to the Bush Campaign..do you really think that Congress will pass a bill that would be fair to consumers....or that Bush wouldn't veto a bill that would go against Bank interests...?
I once asked my bank why they let me draw out more money from my account from an ATM then I had in it. They told me, "Its your responsibility to maintain your balance, not ours." Yet, two years later when a teller accidentally deposited $30,000 into my checking account, I wasn't allowed to keep it...
To The sister:
The way government banking rules allow banks to create "assets" from thin air is a ponzi scheme.
Check this out when you've got time:
http://video.google.com/videoplay?docid=-9050474362583451279
It SHOULD scare the crap out of you.
Bounce fees and ATM fees won't seem like much to worry about.
chabuka:
Bush isn't the only one in gov't taking massive handouts from bankers and financiers.
Check out Pelosi:
"Real Estate" her top industry, followed by "Securities & Investments"
http://www.opensecrets.org/politicians/indus.asp?CID=N00007360&cycle=200...
Hillary:
"Lawyers" followed by "Securities & Investments"
http://www.opensecrets.org/politicians/indus.asp?CID=N00000019&cycle=200...
Mitt:
"Securities & Investments" again
http://www.opensecrets.org/pres08/indus.asp?id=N00000286&cycle=2008
Rudy:
"Securities & Investments" and "Lawyers"
(Getting a bit predictable by now, isn't it?)
http://www.opensecrets.org/pres08/indus.asp?id=N00009908&cycle=2008
How 'bout Barak:
Gee..., who'd have guessed? "Lawyers" followed by "Securities & Investments"
http://www.opensecrets.org/pres08/indus.asp?id=N00009638&cycle=2008
But LOOK WHO LIKES Ron Paul:
US Navy, US Army and US Air Force are among his top five (has to be service MEMBERS, cause the services themselves can't be involved in politics)
http://www.opensecrets.org/pres08/contrib.asp?id=N00005906&cycle=2008
WHO SAYS the troops want to stay in Iraq?!?!
i dig where you're coming from, sister, but holding people accountable for screwing up is one thing, while blatantly taking advantage of them is another. banks know what a hassle it is to switch banks, so they take advantage of that and maximize fees, based not on what's reasonable, but how how far they can push you. additionally, banks are more than happy to babysit, offering every stupid, pointless service imaginable, but they also gauge you every chance they get (in my recent experience at least). i hate my bank, as you can see.
Tell your bank you want to "opt out" This means that if there are not adequate funds to cover your debit card purchase, the purchase will reject. It can cause a bit of embarassment at the checkout at times, but can save you a bundle in the long run.
Also, keep in mind that the best way to avoid bank fees is to keep your eyes on your fries. I work in a call center and the major reason for people getting in this bind is not paying attention to their balance.
This is the most pathetic era in our presidential history.With a president if ever diasected for unscrupulous monetary transactions he would be #1.Therefore he is laughing all the way to the bank. With legalized extortion, rampid corruption and unaccountability and irresponsibility this president is the worst example of ethics in history.
Especially when the free for all taking place has no rules..
MAKESENSEOFIT, I Know how rewarding it is to throw a dart at Dubya's photo, and have it nail the forehead, dead center..., nice & deep, but did you bother to check out all those "opensecrets.org" links that show you how just about ALL the top tier politicians from BOTH Big parties are hip deep in money from big financial interests?
In SPITE of all the Grandstanding you'll see from the Dems on this issue, if you look at where their campaign money is coming from, it's hard to believe that:
A - THEY didn't have a hand in creating the situation we've got.
and
B - THEY're about to do anything REAL to correct it.
I've just directed a film about the whole mess, called Overdrawn!, with Ralph Nader and Joel Bakan ("The Corporation"). We need to encourage people to call their representatives to support Maloney's bill!
http://www.youtube.com/watch?v=PUXRBehEuH0
Just to add onto what my
Just to add onto what my friend has said here, during the recession, like the one we are now having, the banks are making a lot of money from bounced checks. As a result of credit card processing, and late checks, they offer these free accounts and hope that you will bounce a check or over draw on your debit card. Most merchants hope for this as well