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The Last Real Banker? 69
If You’re Served a Lousy Burger, You Don’t Have to Eat It
That’s why the simplest thing you can do to support your community
and its independent businesses is to put your savings in
a local fi nancial institution. By banking locally, whether with
a community bank or a credit union, the chances are far greater
that your deposits will end up being lent to a business or family in
your community—rather than plowed into speculative trading or
some fat cat’s bonus.
Besides, it feels good. Many Americans are still rightfully
indignant over the behavior of big banks that, after accepting billions
of dollars of taxpayer money intended to encourage them to
lend, did the opposite, cutting back on loans and credit lines as
entrepreneurs faced the worse credit crisis in recent history.
As customers, we’ve felt the squeeze of big banks, too. The
rationale for much of the deregulation that has taken place since
the 1970s was that bigger banks enjoy economies of scale that
would trickle down to consumers in the form of lower fees.
Instead, credit card interest rates and fees have soared, and hefty
bank fees have been slapped on everything from overdrafts to
ATM withdrawals. In 2009, with the recession at its peak and many
consumers struggling to make ends meet, big banks raised overdraft
fees, which are triggered when customers go over their limits.
The average overdraft fee for debit card transactions in 2009
was $34, while the average transaction that triggered the fee was
just $20. 9 What’s more, many customers were charged multiple
fees for a single overdraft, helping banks rake in almost $40 billion
in such fees. 10 Banks also raised credit card interest rates
an average 2 percent in the fi rst half of 2009, according to Pew
Charitable Trusts.
At the same time, interest rates on savings accounts have sunk
to less than 1 percent, barely keeping pace with even ultralow
infl ation. Add in creeping fees and it’s a losing proposition. One
media outlet was moved to ask: “Are savings accounts worth it
anymore?” 11
The big banks may have rebounded from the bubble- induced
crisis they helped create, but millions of Americans have lost