...back then, banks viewed customers as people to be helped, not marks to be taken advantage of

[underpants]

Revenge of the Gougers

Me, I’m going with the gouging angle. The revenue that Bank of America, and many other banks, is seeking to replace with its new fees is lucre that a more honorable profession would never have touched in the first place. Indeed, 30 years ago, banks themselves would have turned their backs on it. Of course, back then, banks viewed customers as people to be helped, not marks to be taken advantage of.

It was, to be sure, a different world then, with regulated interest rates, the Glass-Steagall Act preventing banks from getting into lucrative trading and a sleepy business model that valued a steady dividend over a highflying stock price. As interest rates were deregulated, Glass-Steagall abolished and investors demanding that bank stocks perform like Internet stocks, that ethos changed. Banks began looking in some dark corners for new revenue; this is when hidden fees began to creep into credit-card agreements, for instance.

The second source was interchange fees, which gouged merchants who accepted debit cards. Though merchants at first resisted debit cards, they eventually caved because banks made them so ubiquitous. Banks pushed debit cards in part because they are much less expensive to process than checks (which banks lose money on). But banks also got hooked on the absurdly high interchange fees they charged merchants — an average of 44 cents per transaction, even though it costs literally pennies to process a debit-card transaction.

President Obama got it right the first time: Banks don’t have an inherent right to oversized profits. No industry does. Banks play a special role in society, and they get special protections from the government. In return, government has the right to impose special responsibilities.

Every person needs a bank, no matter how rich or poor. The government will never force Bank of America — or any other bank — to reduce or eliminate its fees; it doesn’t have the nerve. But, at the least, it could insist that banks display their fees in a uniform way so that customers can compare how they’re being gouged and make banking decisions on that basis. That kind of reform could stir competition and bring down fees.

http://www.nytimes.com/2011/10/08/opinion/nocera-revenge-of-the-gougers.html?src=recg

[midnight]

1. K&R.. For some reason to tell the American Public that the banks didn't do anything illegal sounds

like frauding the people is legal... There should be clear prices and standards of banking and not a criminal cleverness that takes advantage of the working people.