We've discussed this in numerous posts (like shouting into the wind) - as we concentrate more and more power FROM "too big to fail" institutions INTO "even too bigger to fail" institutions, we remove competition and create near oligopolies. So as we "wipe off the sweat" that we "saved" the system, we can know that our taxdollars created monsters that will be raising fees every which way but loose. You'd scoff at that when you throw in my face how we have 8000+ lending institutions in America hence the country is FULL of competition. In retort I will say to you - please burn this table into your head....
Top 50 Bank Holding Companies
I only wish I had a before and after to show you how these have grown....
Just remember
Old: JP Morgan (JPM) is now New: JPMorgan + Bear Stearns + Washington Mutual (the largest S&L in America)
Old: Wells Fargo (WFC) is now New: Wells Fargo + Wachovia (previously the 4th largest institution)
Old: Bank of America (BAC) is now New: Bank of America + Countrywide + Merrill Lynch
Old: Citigroup (C) ... well that's just a mess
Even #5 on this list (I'm only looking at commercial US based banks) is PNC Financial (PNC) which bought up National City ... but what I want you to concentrate on is how many assets are now concentrated in your Super 4. I don't know how many assets are in the total US financial sphere but let me leave you with this, the 50th ranked institution has $15 billion in assets. So you can imagine what institution #500, or #2000 or #5000 has.
Top 4 (as of 3/31/09):
- Bank of America: $2.3 Trillion
- JPMorganChase: $2.1 Trillion
- Citigroup: $1.8 Trillion
- Wells Fargo: $1.3 Trillion
Then we have a couple of investment banks, 2 foreign banks than really the 5th largest US based commercial bank is PNC at $287 Billion. Just to show you the GULF between #4 and #5
So remember that as the government insists concentrating power into a few huge players is the "right thing" and "free market competition" - I am not going to bother with the math but let's be clear that something like $7.5 Trillion of assets is in the hands of 4 political donors... err financial institutions and the other 7996 commerical banks make up the other 5-8% of the commercial banking system.
So as Obama shuts down the door on egregious credit card fees let's see what's happening in bank fee land! Home of free and open competition, because surely your local credit union can compete with federally supported Bank of America. And if you are reading this blog you probably know the general financial literacy rate in this country - i.e. boom times for banks coming.
Via
USA Today
- For the past year, banks have raised credit card rates to levels that sparked consumer outcry, regulatory scrutiny and congressional action. A law President Obama signed last week aims to stop the most egregious practices.
- But even as outrage was building over credit cards, banks seized upon another way to squeeze profits out of struggling consumers: higher checking account fees. These fees can add up to hundreds of dollars before consumers know there's a problem.
- .....banks are extending some of their most profitable — and controversial — credit card practices to checking accounts. (boo yah! p.s. thanks for the bailout money folks) For example, banks are making it easier and more punitive for consumers to spend more than they have in their checking accounts, just as they allow consumers to spend past their card limits and charge them a steep fee for doing so. Some analysts believe that new credit card restrictions will only accelerate fee increases on bank accounts.
- In June, Bank of America (BAC) will raise its monthly fee on certain checking accounts and impose a fee on accounts that remain overdrawn. SunTrust (STI), meanwhile, is starting to charge customers a higher fee when they overdraw multiple times.
