Reading stories about "Bank Transfer Day" on Saturday, you'd think the financial apocalypse was near. Legions of people prepared to withdraw their money from big banks and bring them to small institutions?
The effort's unlikely to damage the nation's big banks financially. But the coverage seems to be landing a few blows. Here's a look at some of the stories we're reading today.
Amid Wall Street protests, smaller banks gain favor. Not all the money flowing out of big banks is headed for credit unions. The New York Times reports smaller banks are seeing the benefits as well. That's a big deal, potentially, in a state like Minnesota which has a strong tradition of small town and rural banks.
Victory over debit fee is a sign of consumer power. Who needs a federal Consumer Financial Protection Bureau? A CNN contributor writes that Bank of America's decision to pull back a debit fee represents a "transfer of power from large companies to everyday people."
No Fee Pledge' Spreads to Minnesota. Credit Union News reports that Minnesota credit unions have adopted a pledge started in South Carolina to offer "fairly priced" banking services.
There's a caveat, of course, in the pledge: "...my credit union will abstain from charging a fee for members to use our debit cards for as long as market conditions allow us to do so."
Blame Dick Durbin? The Heritage Foundation says blame Illinois Democratic Sen. Dick Durbin for the fees turmoil.
The debit card fees are a direct consequence of the so-called Durbin Amendment, a provision within the deeply flawed Dodd-Frank financial regulation statute. Sponsored by Senator Dick Durbin (D-IL), at the behest of major retailers, the amendment directed the Federal Reserve to regulate the fees that financial institutions may charge retailers to process debit card purchases. Following a lobbying frenzy, the Fed settled on a limit of 24 cents per transaction (on average), or 45 percent less than the customary fee. Thus the cap, which took effect on October 1, will cost banks an estimated $6.6-10 billion a year in revenue.To the surprise of no one, banks big and small instituted (or planned for) a monthly charge on debit cards to make up for the lost revenue. Indeed, many of the free services long enjoyed by bank customers--and the source of competition among banks--are disappearing fast as a result of Dodd-Frank generally and Durbin in particular.
Think consumers won a round with the banks? Think again . CNNMoney writes: "It's likely that banks will eventually fill the hole in revenue. But given the vile reaction from consumers, the banks will probably take a less direct (and arguably secretive - at least by perception) approach to additional fees."
What stories are you reading on the bank fees issue? Post the links below. Also, we'd love to have your perspective on banks, credit unions and fees. Tell us what changes you've made or may be planning to make.