Sunday, April 11, 2004

Bank fees

Title: Banks' newest fee irks many
Source: Raleigh News and Observer
Date: April 11, 2004

From the article:
    Three banks in the Triangle have begun charging noncustomers $3 to $5 to cash a paycheck written against a payroll account at the bank.
Let's say your employer gives you a paycheck and the check comes from Bank of America. You need the money, so you go to a Bank of America branch to cash your paycheck, and the bank charges you $5.

Where do these fees end up going? As the example mentioned in this post reveals, the CEO of Wells Fargo bank made $36 million last year. This post points out a similar situation at Wachovia bank. Banks are making gigantic amounts of money from all the fees they now charge, and this money is all going to the wealthiest Americans.

The article points out, "the fees bite low-income workers who need the money the most." Low income workers are much more likely to live paycheck-to-paycheck. They need the money from each paycheck for essentials like food, housing and electricity. There is no justification for the fee, but there is nothing to stop banks from charging it. And there is nothing low-income workers can do, if they need cash immediately, except pay the fee -- They are basically at the mercy of the banks. Charging poor people and redistributing the money to wealthy people is a perfect way to concentrate wealth.


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