Citibank increasing fees on checking accounts

[Capt Caveman]

Why isn't Spidey happy about this? Doesn't he want more transparency? If you don't like it, switch to another bank.

 

[Moonbeam]

Bank fees of this kind are good for banks and the rest of us. Banks should be making their money on the services they provide not of speculation in derivatives and all the other horse shit they did. Let them compete on fees.

And the breaks to the retailers will be passed to the consumer because competition in retail is so tight they keep their profit margins as thin as possible. If banks have to compete on services they provide their service will improve and the costs go down.

 

[IronWing]

The banks are using fees to carry themselves through the current downturn. With interest rates so low, they prefer to sit on their cash piles so they don't have a lot of interest income coming in. Maybe the econ prof - former IMF guy NPR interviewed this morning had it right and the Fed should print even more money until inflation explodes and knocks the economy off dead center. Then the Fed can raise rates and the banks and savers can make money on interest again. The trick is to not save anthing until the second phase.

 

[Darwin333]

Fee=tax on consumer.

Is my cable bill also considered a tax on consumer? If it is, can I write it off?

 

[Darwin333]

Why isn't Spidey happy about this? Doesn't he want more transparency? If you don't like it, switch to another bank.

What wasn't transparent about it before?

Instead of charging the consumer to use their debit card the bank charged the retailers for the privilege of being able to use the debit card for transactions. The fee was small but when you are Walmart even a nickel a transaction equals a fuckload of money. Congress capped that fee which resulted in a large loss of revenue for the banks. The banks must now charge the account holders to make up for the loss of revenue.

There are a lot of fucked up things the banksters do but this was a problem that didn't need fixing, imho. The retailers and the banks both agreed upon the terms. The banks did not force the retailers into the contract and a lot of retailers only accept certain cards because they have the lowest fees.

And the fee was so small on a per item basis (a penny or two) that there is no "competition" incentive to lower prices to reflect the retailers savings. Will you or anyone you know even notice if lowes is selling lightbulbs for $.01 cheaper than Home Depot? Would you drive even a tenth of a mile further to save that penny?

The only good thing about this is that it has people pissed off at the big banks. Other than that this was simply Congress helping Walmart to increase its profits at the expense of another industry, which imo isn't their job. Further proof is that this only applies to large banks. If the fee is wrong enough to require Congressional action then why would so many businesses be exempted from that action?

 

[Darwin333]

Already answered by others in this thread-it was the outrageous and excessive processing fees appled to retailers, which of course were passed onto and paid by consumers. Even customers who paid cash were, in effect, subsidizing "free" checking at banks they didn't even have accounts at.

Last I checked no one forced the retailers to accept specific (or any) credit/debit cards. They do because it vastly increases their sales and profits.

You still subsidize the retailers cost of accepting cards because the fee hasn't went away entirely, it was just capped and the difference will be kept as profit. It is so low on a per item basis that you would never notice if they lowered the price to reflect the savings anyway (which takes out the entire competition forcing them to do it argument).

Finally, if as has been assumed in these threads, people do leave the big banks en masse then the retailers won't save that much money anyway since the smaller banks and credit unions are exempt from the legislation.

So in the end you will just be subsidizing free checking at a different bank and slightly higher profits for the retailers and a bunch of people are going to end up paying this fee. The "consumers" did not win.

 

[OutHouse]

Bank fees of this kind are good for banks and the rest of us. Banks should be making their money on the services they provide not of speculation in derivatives and all the other horse shit they did. Let them compete on fees.

And the breaks to the retailers will be passed to the consumer because competition in retail is so tight they keep their profit margins as thin as possible. If banks have to compete on services they provide their service will improve and the costs go down.

which is why i will not do business with a bank that is charges me fees to KEEP my money to play around with it on wall street.

 

[Lanyap]

Already answered by others in this thread-it was the outrageous and excessive processing fees appled to retailers, which of course were passed onto and paid by consumers. Even customers who paid cash were, in effect, subsidizing "free" checking at banks they didn't even have accounts at.

If Citi wants to charge $xx per month for checking, a smart consumer looks at the alternatives-other banks, stock brokerage account, online accounts like ING, etc. I personally write may 2-3 checks a month, at the most, outside of two accounts where I am mandated by law to have a checking account (very special situation and they are business accounts).

Credit cards have the same hidden fees.

The retailers will keep as profit the difference on the old fees and the new fee caps for debit cards. This will hit the poor the hardest since they are not always smart enough to handle their money properly and they may not have enough money to meet the no-fee requirements. They also may not have a credit union to transfer to.

You keep justifying this change but bottom line is retailers and banks will take more money from most consumers, especially the poor who can't afford it. Durbin's last minute amendment will end up hurting more people financially than it will help.