Banks vs.Credit Unions


A recent column by Molly Ivins in the Fort Worth Star-Telegram exposes another of the many advantages Corporate America is acquiring over the average American. Ms Ivins, for the information of my regular readers, is one of the last shining lights in journalism who still tries to provide the necessary information you need to form an intelligent opinion and does it with a sense of humor.

The latest wall erected between the idea of fairness and the reality of the Republican Revolution is the recent decision by the ultra-conservative Supreme Court greatly limiting your access to credit unions and basically forcing you to do your financial business with banks. The case, 1st National Bank vs. National Credit Union Administration, will have the sad effect of moving your money out of your accounts and into the bank's profits through their obscene and sometimes hidden fees.

Credit unions were founded, and given special tax breaks, in order to serve groups with "a common bond". They wanted to expand access for a wider variety of groups, most notably for those who did not constitute a large enough assemblage to create their own credit union but desired to join rather than pay the ridiculous fees and charges banks are currently enjoying. Credit unions have always been the superior place for an individual's financial acts and, thus, a long time target of the insatiable banking industry.

Because credit unions are owned by their members, profits are returned to the members through interest paid on checking and savings accounts as well as higher returns on CDs and IRAs and free ATMs. Their members can even interact with a real human being in person or on the phone without being charged for the privilege. Also, because of the insurance on deposits, it is as safe, if not safer, to have your money deposited in credit unions. I say safer solely because credit unions are not a part of Corporate America and, thus, cannot be bought and vandalized by larger institutions in search of even more obscene profits through the theft of your assets.

Banks, of course, are charging fees for seeing a teller or using their ATMs or for using the bank's deposit slips or bouncing a check (usually a $5-$20 fee for what has been shown to cost the bank less than $1) or even speaking to someone on the phone. Individual savings accounts can easily be eaten up within a year simply through the payment of these excessive fees and hidden charges. In fact, according to the Federal Deposit Insurance Corp., the record profits that banks have enjoyed for the last six years show that the percentage of those profits from fees has risen from 25% in 1984 to nearly 40% in 1997. In fact, banks received $30.9 billion in fees alone in the first nine months of 1997, an increase of 15% from 1996 revenues. In Canada, for comparison, fees account for only 5% of profits and the industry there is in fine health without the need of victimizing their depositors.

The abnormal love of Corporate America, which began in earnest in 1980, has also resulted in massive mergers between banking institutes which were allowed, in basic violation of anti-trust laws, because they promised huge savings for consumers. That lie has now been exposed without doubt. This madness has only resulted in branches being closed, particularly in rural or inner city areas, and staff levels reduced sharply as well as causing the introduction, according to the "Financial Post", of over 100 new fees.

Even the recent decision by the federal government to forever cease issuing paper checks for all benefit payments will prove unbelievably profitable for the banks since everyone receiving those checks must now have an account into which their payments can be electronically deposited. Imagine the glee with which the bankers will happily siphon off the small assets of the poor through their fees now that they have the poor and elderly captive in their financial traps. Bank of America, the McDonald's of the banking industry, has been known to even charge the poor an additional fee if their accounts reach zero anytime during the month. That means that the poor, the elderly and the disabled will be forced to leave some portion of their meager assets sitting in the bank's greedy little paws and lose the ability to use that money month after month. A rather interesting form of extortion, wouldn't you agree?

This nonsense is just another example of the lie that conservatives repeat constantly about the magic of the marketplace and the ability of private industry to arrive at fairness through competition. The only magic, dear readers, is Corporate America's dirty little thefts from your pockets with the government's assistance and blessings. It is far past time to wake up, America, and realize that neither the Republicans nor Corporate America have any care whatsoever for your well-being. The Democrats, alas, might have cared at one time but that was before they decided to imitate the Republican's amazing ability to sell their souls to the highest bidders. That was a bidding war that normal Americans were never invited to, remember?

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Copyright 4/6/98