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Well if you want that then the people who have small balance accounts will be asked to leave the banks and go back to Western Union and Pawn Shops to cash their checks and pay their bills...

If you are not one of the customers that has at least $10,000 on deposit (and more like $100,000) with a bank, you are basically a money loser for them and the money they spend keeping your account there, sending you statements, answering your phone calls, staffing your a loss leader for them.

So the banks will either have to raise other fees (like per check fees or account maintenance fees) or some other "go fuck yourself" fee to get rid of you.  Like it or not the only reason why they kept your small checking account around was so that you would pay the $35 fee every time you overdrew your account, otherwise they would have never accepted your account in the first place.

Now perhaps some credit unions and community banks will keep some of the marginal customers but the rest will find themselves back in the 1970s with doing basically a cash lifestyle.  But the good news is that you won't have anymore bank fees to complain about.

Bove sums it up quite nicely:

Bove says as much as 30% of U.S. households could find themselves being forced out of their banks since they're not deemed profitable.

The shift will create investment opportunities as depositors look to other companies to provide banking services. In this scenario, Bove thinks consumer finance firms, payment system companies, pay-day loan companies and pawn shops will pick up the slack.

As the government moves to make the cost of banking higher for the banks, they're going to have to pass on those costs to the consumer," Bove says. "If the consumer doesn’t like it, the consumer is going to have to rely on these less-established methodologies of getting finance and moving money."

I remember when I first started working after college making $17,5K per year, I had to go to 3 banks and have a reference before they would take my was like applying for a job.  And the place I finally established my account with, was "doing me a favor" because of a reference from my Dad's friend who was a good customer with the bank.

I was indeed lucky to be able to open a checking account and paid both transactional fees (per check) and a monthly maintenance fee.  In addition to agreeing to have my check direct deposited with them.  So likely as a result of the regulations (which I happen to agree with) many of the marginal customers will be shunned from banks and will be relegated back to secondary institutions.  

But from the sounds of many of the biggest complainers of check bouncer fees at DKos, they may be better off not using banks anyway as it seems too complicated for them to not bounce a check for a variety of reasons that have been well documented.  The good news is that you can actually tell the banks to go to hell...alas they will be telling you not to let the door hit you on the ass while you are leaving.

Originally posted to dvogel001 on Tue Nov 24, 2009 at 10:32 AM PST.


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