The banking industry was built on the backs of average citizens, such as farmers, and these same institutions have seemed to have lost sight of this as they have grown. Now they have gotten to be such big businesses that they have lost touch with the plight of the same average consumer that is out of work and,consequently, out of money.
The banks should have to have different programs for all different types of people. Not everyone can keep or have thousands of dollars in a bank, and the majority of people do live pay check to pay check. The way the society is set up, we also have to have a bank account.
Low-income Americans are positioned as the prime target to lose a large percentage of their meager paychecks to miscellaneous fees from banks. $2.00 to a person making $250 a week is a much higher percentage than $2.00 to a person making $1,000 a week. Many times, these fees pile up because there are so many different ones. The government needs to pass law to extend free checking to low-income Americans.
I do feel that U.S. banks should have an obligation to provide alternatives to checking account fees and minimum-balance requirements to protect low-income Americans. My current bank does not require a minimum balance. It also does not charge a monthly bank fee. If my bank can do this and remain in business, there is no reason all banks should not be able to do so.
Banks use our money. They loan it out and keep the interest on those loans. If we keep enough money in the bank long enough we may reap a tiny reward for this in the way of interest being paid by another customer's loan interest. So basically the bank makes its money from its customers. Therefore banks should not be charging anyone fees; but since they do there should be different checking and saving account packages for every budget--including the poor. And most banks do in fact have such options already.
I definitely believe that banks should do something to provide checking accounts for people who live from paycheck to paycheck. It is becoming almost impossible to live in today's society without a checking account with many employers requiring direct deposit. Since I realize that banks do need to make a profit, perhaps they could consider a very small fee for people whose income falls below a certain level. I think that many bank charges are much too high, especially during these hard economic times.
Some banks offer free checking as an incentive to people to bank with them, so it should be available to everyone. Minimum balances are tricky because if you penalize someone for not having enough in their account, you're taking money away that isn't there in the first place. As long as people aren't bouncing checks, there shouldn't be a minimum balance. People who live week to week, relying on every cent they make, need a chance to get on their feet and get established more, rather than getting penalized.
There have been many times in my life where I have had to live from paycheck to paycheck or even without one, and having to pay a monthly "service" fee every week to your bank for having them do absolutely nothing but retain your money for reinvestment is completely ludicrous. The worst part is that some banks will even charge you this fee only if you do not have a direct deposit linked to your account. How does this make any sense what-so-ever? It is travesty and specifically targets individuals who are currently out of work or have been laid off their job.
With so much current debate in this country over assisting the unemployed and introducing new jobs, it is amazing to me that this practice has not been completely abolished and has not received more attention from the general media.
I believe that the banking industries practice of minimum- balance requirements and checking account fees unjustly target low-income Americans. The fees and requirements are a form of discrimination and only serve to make it more difficult for those stuck in poverty to find a way out. Many low income people are forced to lose even more of their menial pay check by paying a fee to have a check cashed at a retail store due to these banking policies. furthermore there seems to be no reason for these fees and requirement other than banks attempting to extract as much profit as possible at the expense of millions of Americans.
My belief is that the Banks have enough profit from using the customers money to invest. The Banks are also charging for a lot of services they provide anyway. They charge for checks that bounce, overdraft, late payments, check books, loans for housing, cars, and personal. Businesses that use the banks also pay high premium for services received.
U.S. Banks are businesses and should be free to do as they please. Businesses have no obligation to do anything, they have to do what they need to to keep customers.
I oppose this obligation, because the government has no Constitutional authority to regulate banking practices, beyond the actual issuance of currency. Instead of regulations, we need a truly free market. In a free market solution, some banks will offer alternatives to these fees, which will allow Americans with low incomes to obtain bank accounts. Those that do not, will lose this customer base. Government intervention and regulation has created our current financial crisis, and further intervention will only make it worse. Get back to the constitution by getting the government out of issues it has no authority to regulate.
Banks are businesses. They must maintain a cash flow in order to operate their ATMs and other services that they provide to the community. If they were required to waive minimum balance requirements or checking account fees for low-income Americans, they may not be able to maintain their cash flow. Furthermore, it would be unfair to only waive these requirements for those who are low-income. Citizens have a choice in deciding whether or not to deposit their money into an account. If low-income families are unable to abide by maintenance fees or minimum balance requirements, then they should decide to keep their cash in their wallets, and not in a bank. Unless a law is passed, requiring all citizens to keep their money in a bank, the banks should have the right to decide what types of fees and requirements are necessary in order to maintain their business.
Capitalism, in itself, is sufficient to handle our banking system. While some banks might not provide alternatives to checking account fees and minimum-balance requirements, there are others that may. In our economic system, if providing alternatives is a successful venture, more banks will do it. It should not be a burden on the bank's shoulders to change their business practices to a point where they might be unable to keep their own business in order.