Crowning themselves kings of the competition to see who can charge poor people the most money, Citibank has decided to increase its fees for certain accounts, topping all other banks with up to a $20 fee per month if clients have less than $15,000 sitting in the bank. For lower-level accounts, Citibank will charge $15 a month for accounts less than $6,000.
No other bank has announced charges even close to this, with Bank of America getting the majority of the attention with its $5 per month fee for debit card users. But Citibank has topped them all with quadruple the fee.
Penalizing anyone with less than $15,000 in the bank is a surefire way to level the brunt of the new fees at the poorest customers Citibank has on its rosters, as they will be most likely to fail to meet the minimum balance, and with the current state of the economy, there are likely to be a very large number of these people.
The policy has a secondary function as well, which encourages people to leave enormous amounts of money sitting in the bank, rather than being channeled into more lucrative investments or other purchases which would benefit the local economy, which also disables the ability of customers to make one-time transactions, such as health care costs, that might need to be made no matter what. Instead of anyone else benefiting from that cash, Citibank will have it lining their pockets, with which they can make the same risky bets they did before, or simply charge people money if they don’t do it.
The cause of these unprecedented fees are the recent financial reforms which limit how much banks can charge for overdraft fees and debit card transactions, the latter of which took the form of the swipe fee battle, which led to some of the most significant lobbying efforts all year. Without these methods to line their pockets, the banks are simply figuring out different ways to get money out of people.
Sadly, bank membership has declined in value, not even keeping pace with inflation in many cases. With absurdly poor interest rates, banks are no longer institutions at which people can invest their money and watch it grow; bank accounts are financial services that cost people money to use. With more and more fees and minimum balance requirements, it will only mean less money for local businesses, regular people, and less than affluent families, and more money for bankers who took a huge bailout and continued to give themselves enormous bonuses.
Wells Fargo and Chase Bank have followed the fee bandwagon by announcing charges of $3 per month for debit card uses. While none of these fees are by any means enormous, they add up to billions of dollars that go to banks instead of local merchants and wages, simply representing the trickle-up economics that have been going on for so long.
Credit unions, meanwhile, have been experiencing record revenue in light of these circumstances, touting their non-profit approach to business, with better interest rates, no fees, and vastly superior customer satisfaction.
This is not the time to complain. This is the time to bail.
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