Banks make $30 billion a year from checking account fees, and they’ll be damned if they let you or the government try and stop them.
In fact, we’ll be lucky if they even let us see exactly what it is they’re doing.
We’ve talked before about how futile efforts to regulate banks in the wake of the financial crisis have been. Banks have successfully lobbied to water down and exterminate new regulations wherever possible.
Now they’re at it again.
The Consumer Financial Protection Bureau and other government regulators want banks to provide detailed breakdowns of their account-fee revenue in public quarterly reports filed with the FDIC.
That would give the consumer bureau data it could use to write new regulations curbing revenue from overdraft services.
Regulators are concerned about the way banks sign up customers for what they frequently market as “overdraft protection.” The consumer bureau said in a June report that banks may be misleading customers in sales pitches, and that those who use the service face more involuntary account closures.
Well, if that’s true — and it almost certainly is — banks don’t want to own up to it. And their lobbying groups — the Independent Community of Bankers, the Financial Services Roundtable, the American Bankers Association, and the Consumer Bankers Association — are working to ensure that they don’t have to.
The CFPB has already offered to waive the condition for banks making less than $1 billion a year. That would eliminate 90% of U.S. banks. But that’s still not enough for the banking community.
Clearly, they’re hiding something, but we’re not likely to find out what.
The Dodd-Frank Act has been a miserable failure. Barely 40% of the bill has actually been written. About two-thirds of its deadlines missed. And the Volcker Rule was effectively gutted.
Don’t expect to win this battle, either. The banking lobby is just too powerful.
