72 failures so far this year: Three more US banks collapse

[Hannah Bell]

US regulators closed another three banks last Friday: First State Bank and Community National Bank, based in Florida, and Oregon’s Community First Bank. The Federal Deposit Insurance Corporation (FDIC) is expected to pay out $185 million to cover closure costs and insured deposits for the three institutions. A total of 72 US banks have collapsed so far this year, up from 25 in all of 2008 and three in 2007.

The elimination of many smaller institutions is in line with the strategy of the biggest banks, aided by the Obama administration, to utilize the economic crisis to engineer a sweeping reorganization of the banking and financial system, concentrating greater market share and economic power in the hands of a few giant firms. The Troubled Asset Relief Program (TARP) and other bailout measures overseen by the Obama administration and the Federal Reserve have enabled firms such as Goldman Sachs and JP Morgan Chase to reap record or near-record profits—and reward their leading personnel with bonuses as big or bigger than the multi-million-dollar payouts that preceded the crash of 2008. This is in part due to the elimination of major rivals such as Bear Sterns, Merrill Lynch, Washington Mutual and Lehman Brothers...

At the same time, the FDIC is selling failed banks to larger institutions at bargain prices—and in many cases with a no-loss guarantee on bad debts. “Cleaning up after bank failures is one chore you won’t hear bankers complaining about,” Fortune magazine noted in an article last month, which highlighted the FDIC’s so-called loss-sharing agreements. “It’s this provision—capping the acquirer’s losses at the expense of the fund—that is most alluring.”

The socially destructive activities of the banks and financial institutions are continuing to inflict severe hardship on broad sections of the population.

Credit for consumers and small business owners remains either unavailable or too expensive. The Federal Reserve reported Friday that consumer credit in the US declined in June for the fifth straight month. Banks have also hiked their fees and charges, disproportionately affecting low-income earners.

The Financial Times yesterday reported that research company Moebs Services found US banks stood to collect $38.5 billion in customer overdrafts this year. “The crisis has prompted many banks to lift charges on overdrafts and credit cards in order to boost profits,” the Financial Times noted. “The most cash-strapped customers are the hardest hit by such fees, with 90 percent of overdraft revenues coming from 10 percent of the 130 million checking accounts in the US. Regular use of overdrafts is most common among consumers with low credit scores, Moebs discovered.”

While the major banks, bolstered by trillions of dollars in government cash and subsidies, are reporting higher earnings, American workers are suffering a drastic fall in wages. Commerce Department data released August 4 showed a 4.7 percent fall in wages and salaries in the twelve months to June—the largest decline since records began in 1960...

http://www.wsws.org/articles/2009/aug2009/bank-a10.shtml

[CoffeeCat]

1. This article is just chock full of horrendous news...

We've got 50 more bank closures this year, than we had in 2008.

Failed banks are being gobbled up by the large banks, and the FDIC is practically giving away these banks to the
larger institutions.

In order to turn a profit these smaller banks are gouging customers with fees, and 90 percent of these fees come from only 10 percent
of the population, most of which are poor. Holy buckets. Why do these people bother with checking accounts? Get your paycheck cashed
at Walmart and dump these predatory lenders...which is exactly what they are.

How can we have a recovery with this malignant stuff happening? The fundamentals of our entire economy are collapsing.

[FarCenter]

2. This is 72 out of over 8000 banks

So less than 1% have closed so far this year. But there will be a lot more.

I'm not sure what the net decrease/increase is, since new banks are started and other banks merge without FDIC intervention.

[SpiralHawk]

3. "Hooray - America is FAILING." - Republicon Homelanders

[Hannah Bell]

4. nice straw.

[WillyT]

5. Here's A List For Ya !!!

Link: http://www.fdic.gov/bank/individual/failed/banklist.html

:shrug:

[gmoney]

6. Another victory for free market solutions?

Stupid government, insuring the deposits of all those people who were STUPID enough to bank with an institution that was going out of business... those people DESERVE to lose their savings for such lack of foresight.

:sarcasm:

[HamdenRice]

7. Yet another misleading article from WSWS posted by Hannah Bull

Here's one of many misleading pieces of trash that litter the garbage strewn article you decided to cross post:

The elimination of many smaller institutions is in line with the strategy of the biggest banks, aided by the Obama administration, to utilize the economic crisis to engineer a sweeping reorganization of the banking and financial system, concentrating greater market share and economic power in the hands of a few giant firms.

This implies that banks are being deemed to fail as part of a "strategy." That's a bald faced lie.

Banks fail because of their balance sheets. The FDIC takes them over -- usually between a Friday and a Monday morning -- and their decision to do so has nothing to do with other banks' "strategies."

To believe this garbage pail of lies, you would have to believe that the FDIC decides to take over banks because of what larger banks tell them to do.

Do you have one shred of evidence from this -- preferably from a source other than "WorldSociopathologicalLiarsWebSite"?