The Latest Banking Scam: Which Dog Do We Kick?

According the the Washington Post, the GAO will shortly release a new report that consumer “banking fees are rising and are often undisclosed.”

Banks are failing to provide consumers with information about fees on savings and checking accounts even though federal rules require such disclosures, according to a government report to be released tomorrow.

The report by the Government Accountability Office also says that some of the invisible fees have climbed substantially in recent years. The average overdraft fee, for instance, increased 11 percent from 2000 to 2007.

GAO staff members made undercover visits to 185 branches of 154 depository institutions throughout the country and were unable to get comprehensive lists of checking and savings account fees at more than a one-fifth of the locations. The information was not available on the Web sites of half of the institutions.

Lack of transparency remains alive and well in our financial institutions. The squeeze is on.

Of particular interest are the comments following the article. On knowledgeable commentator, cleancut, notes that

i work at a bank and that’s the line were suppose to give people who literally come to us crying because they were charged $200 in overdraft fees when they thought they had money. Another trick the banks use to maximize fees is by debiting your account from the greatest amount to the least. Once the large item is posted it will cause more of the smaller debits to cause overdrafts which generate more fees.

But of course there are those who blame the victim (jayreal00)

Couldn’t all this be avoided by people balancing their checkbooks? With online banking one can instantly check on his or her balance. The problems is Americans have bought into the credit culture. People try to game the system. It’s one of two things, people either know that they don’t have enough money in their account, buy something, hoping to put money in at a later time before the charge goes through. Or an individual has no idea how much is in the bank and just spends like it’s a credit card. Personally I don’t know which is worse but I have no sympathy. Banks have a right to charge these fees. However, it should be fully disclosed

London Banker over at Roubini’s made a blistering attack on the American psyche:

Miss America, the USA has become selfish, atomistic and isolated – hating everyone that fails or is different.

Europe is more generous, socialist (yes, I really used that word in a positive sense) and collective – embracing everyone who is weak and in need.

America imprisons 4 times as many of its own people. It denies healthcare to 45 million people. It treats the victims of Katrina as the enemy. America has rampant crime and murder. America has wars. America is gradually becoming a police/surveillance state.

Europe believes in society. Europe believes in the “common wealth”. In Europe you are not allowed to be rich, but everyone lives well. If the rich have to sacrifice to ensure that the poor have dignity, they will do it with a generous spirit. You underestimate Europe. America may have “Christianists”; Europe has christians.

When the bad times come, we will have cohesian in Europe. We will pull together, German and Spaniard, Norwegian and Italian.

Because we fear the alternative of division, hatred and war more than we fear embracing each other

Whether London Banker is right about Europe or not–I am sure we will have lots of comments on that score (in a general sense, I think he is)–, what struck me were two words: atomistic and isolated.

Jayreal00 does blame the banks, but he is torn between blaming the banks and blaming the victim. Clearly, he is not monetarily sailing close to the wind. He sees himself, I suspect, as quite successful: An individual who is smart enough to weather the storms.

Now consider a silverlucie’s comment:

I couldn’t agree with you more. Each of us is responsible for our finances. Banks cannot rip us off if we use them wisely. I have very little money, yet I have never had an overdraft fee. I use my credit card only for emergencies and only in the amount that I can pay for at the end of the month…I refuse to let the bank rip me off with finance charges. It’s not that hard….stop going to discount stores for entertainment, spending money on junk that, once you get it home, is unsatisfying and unpaid for. It’s up to us, not the banks…who will rip us off at every turn, but only if we let them.

Again, we have the individual who is smart enough to weather the latest storm; and, because she can weather it, she implicitly lays some of the blame on those who failed. She does not ask about their circumstances or even their abilities. She rises victorious and self-congratulatory, singing her own praises.

How do many of us view the world? What is our worldview? Do we see the world merely as a horrid contest, a kind of Darwinian struggle for individual survival? Is it neighbor against neighbor, village against village, company against company, country against country? Or do we see it as a collective endeavor?

Is London Banker right that we are atomistic, that we lack cohesion or generosity? In our drive for wealth, we celebrate individual successes–however small–are all too ready to kick the less fortunate? How did we view the victims of Katrina? Were they just too stupid to get out of the way? Is our debate over health care and social security, in some ways, another Katrina?

In small and innocuous ways and comments, we reveal ourselves to the world. How we respond to the latest financial dodge says a great deal about how we view the world, our values, our spirit, and our responsibilities to our neighbors.