Dodd-Frank and citizen action: send a message to big banks

If you don't already bank with a small, local bank or a credit union, maybe this will break your proverbial camel's back.
Bank of America, the nation’s biggest bank, said on Thursday that it planned to start charging customers a $5 monthly fee when they used their debit cards for purchases. It was just one of several new charges expected to hit consumers as new regulations crimp banks’ profits.

Wells Fargo and Chase are testing $3 monthly debit card fees. Regions Financial, based in Birmingham, Ala., plans to start charging a $4 fee next month, while SunTrust, another regional powerhouse, is charging a $5 fee.
What are these regulations that are oh-so-onerous on the big banks that got a lifeline from us taxpayers to stay afloat during the financial crisis? You see, the Dodd-Frank Wall Street Reform law limits how much fees banks can collect for transactions on their debit cards to 24 cents per transaction, when the average stood at 44 cents per transaction before these regulations go into effect. That has the potential of cutting down on the bottom line of the too-big-to-give-a-shit-about-you institutions:
While the fee amounts to pennies per swipe, it rapidly adds up across millions of transactions. The new limit is expected to cost the banks about $6.6 billion in revenue a year, beginning in 2012, according to Javelin Strategy and Research. That comes on top of another loss, of $5.6 billion, from new rules restricting overdraft fees, which went into effect in July 2010.
Yeah, that Obama dude, he's real easy on those banks, isn't he.

But returning to the point, for the big banks that are crying about losing $6.6 billion, it amounts to about 7.5% of a combined total profit in 2010 of $87.5 billion for the nation's banking industry as a whole. That's profit, not revenue.

So don't let anyone tell you that this is about regulations. It's not. It's about the big banks looking for ways to make money without actually working in the business they are actually in, namely banking. When did the banking business turn into a fee-collection service rather than, you know, banking? If the banks want to make up the difference, hey, here's an idea: stop sitting on your goddamned cash and start loaning it out. Go make money the old fashion way.


But if we just sit here and lament at the banks, nothing is going to happen. Banks won't pay attention to you if you just bitch and moan. You need to do something more - something that is completely within your power, by the way. Take your money out of the big banks, and move it to credit unions and local community banks. It's not even hard to do.
Once you have chosen a bank, open an account and transfer all your money from your bank to your new community bank or credit union. Close down the big bank accounts, and be sure to tell them why.

I live in the Silicon Valley and have banked with Technology Credit Union for years now, and I am a very happy camper. The best financial decision I ever made might have been to close down my Citibank account and never look back. All the credit unions allow you to use each others' ATMs (and real tellers) for deposits and withdrawals without any fees (I know, shocker). And most credit unions now have agreements with Seven Elevens for you to use their ATMs for free as well. And oh, no fee for you using your own money to buy things.

So move it, and move your money!