Why do banks charge so much for overdraft fees?OK I have researched this question and it seems the only valid answers I have come upon are " YOU SIGNED A CONTRACT or ITS YOUR RESPONSIBILITY" or the famous "ITS JUST THE WAY IT IS" and these answers have been given by MOST BANKERS. which are both correct but agreeing that it is unethical for... | |
Here's my take on the high fees. Somewhere along the line, 'kiting' checks became a rather large problem. I think that trend started 'catching on' with the criminal-types in the late 1970's. That scam practice continued to grow in the 1980's, and really 'caught fire' in the 1990's. The banks were the ones left 'holding the bag' and having to cover all those 'kited' checks. A lot of people overdrew their accounts by large amounts and then conveniently filed bankruptcy, erasing those debts. (Bankruptcies were approved rather more easily in the good economic times of the 1980's and early 1990's than they are today).
The (powerful) banking industry successfully lobbied Congress to allow the new and higher overdraft fees, ostensibly to at least partially recoup the losses they took in the past. Naturally, the banking industry is happy with that law. To overturn it will require a massive lobbying effort on the part of average American citizens, which is not going to happen any time soon. Americans seem to be almost apathetic sometimes - you rarely see a nation-wide outcry over hardly anything anymore. Hence, nothing hardly ever gets changed - regardless of if it, at bottom, is unethical.
Cable TV companies are happy as well with the virtual monopolies they hold. Many areas of the country have only ONE provider. For example, I live in downtown Seattle. There is no choice. There is only ONE cable TV provider in this metropolitan area. Take it or leave it. Since there is no competition, the one provider is free to raise their rates at will - and they do. Actually, there WAS a large public outcry against this system here in Seattle, and even in Washington State as a whole. Nothing was changed. The powerful lobbyists funding the politician's campaigns win the day - and the votes on the issue. AND this same cable TV issue actually reached a nation-wide peak a few years ago. (The cable TV virtual monopoly thing is pretty common nation-wide). It went before Congress, they considered it - and did NOTHING, even in the face of MASSIVE evidence showing the virtual monopoly practices. I guess the Sherman Anti-Trust Act, although still on the law books, is not really a law that needs to be observed anymore. *sigh*
