Banks are businesses and as such they want to make as much money as is possible. They, like the rest of the world in 2008 took a big loss and some even were forced out of business. Fees are to banks what taxes are to the government and this is one way of getting their finances in order. The bank regulators understand it isn’t something the public likes, but in a depressed economy each must do what they can to get along without going bankrupt.
People can pick and choose banks and if they aren’t satisfied with one, and if they believe their fees are unreasonable they can select another bank. Banks are necessary and few people can get along without them. While a few social security recipients are still are receiving their checks through the mail, the next year will bring a close to that. That will make banks a necessity for nearly everyone.
Still, as most people will agree, fees are being tacked on in 2012 at an alarming rate. Why is this? From an outsider’s point of view,it’s to raise money. Aside from the necessity to raise money, they know that soon everyone will be using a bank and why not make them pay for the privilege? That’s reasonable up to a point, but what they don’t realize is if too many find their prices too high they’ll take their business elsewhere.
Another reason the banks are charging the customers more is a way of fighting back at the restrictions placed on them and their credit card fees. Their annual rates were way too high and a governmental crackdown forced them to lower their annual fees and their interest rates. They had no other choice but to recoup their losses some other way, and where else but with the checking account customers. Few people can do without checking accounts and this is one way of stashing away extra cash so they’ll be ready to deal big time every chance they get.
Banks are regulated to ensure they don’t allow themselves to take risky chances and fail. When banks fail and the government has to bail them out, it throws the whole economy into a recessed state. In fact, it was partly due to deregulation that allowed for such greedy practices that banks engaged in. They lowered their standards and everyone lost.
Not all banks are regulated in the same way or at the same level, but all have some type of action control. Some banks are under national control and some are controlled at state levels. Customers don’t really care, or most of them don’t how they’re regulated but that they are. Yet they need to know that state and national levels of regulation are different. This may have a lot to do with how they can charge extra fees.
Even state banks aren’t totally free of federal control. They do have to abide with some of the rules and regulations. The supervisory control of the American banking system is The Office of the Comptroller of the Currency and was started by President Lincoln in 1863. It was to safeguard the people’s money and to ensure that exorbitant rates weren’t charged. The same practices are in effect today. Therefore to understand why banks are adding on extra fees in 2012 it must be something allowed in the regulations.
The FDIC (Federal Deposit Insurance Corporation) is another way customer are regulated. If there are problems with the way banks are handling people’s money, then this is the organization to look to for answers. All in all banking and its regulations and its deregulations are not always understood by customers. All they understand is they’re paying more for the bank to handle their money and they want it stopped. They fail to understand that everything worthy costs money and it may be why the world is in the economic bind it is in. Therefore it is remotely possible that the banks add some extra fees in order to stay in business.