The Real Story Behind Low (and Negative) Interest Rates – Are Big Banks Pushing Credit Unions Out of Business?
Are the banksters attempting to eliminate their local, community-owned competition in the fractional-reserve banking system? Last October, Bank of America faced a backlash from angry customers when they attempted to raise fees. Droves of people left the bank (and others) to put their money in credit unions. Credit unions serve most Americans better than banks, because they generally offer lower interest loans, have fewer fees for membership than banks charge for their accounts, and offer better service. Here’s a story from October 2011:
More banks are hitting customers with fees, but there are ways to get around them.
Citibank announced increased fees for some of its checking accounts, and that they’ll be phasing out free checking accounts, and if you have an EZ checking account, you’ll need to keep $6,000 in your account or pay a fee of $15 a month.
And as you know last week Bank of America announced a $5 a month fee for using your debit card. Consumers are not happy and many of them are turning to credit unions.
Remember, this is the same banking industry that received hundreds of billions of dollars in government bailout funds over the last few years and handed out massive bonuses to the bank bosses, even in companies losing money. Unemployment is high, wages are falling, and government involvement in healthcare is pushing up the costs of medical bills for Americans. Seems a bit greedy to raise fees on customers given all that, no?
For those familiar with the Federal Reserve System, recall that money is created essentially out of thin air by the Fed, then loaned out at a low interest rate (that’s the rate the Fed always adjusts) to the rest of the banks. My inkling is that the bigger the bank is, the better the deal they are getting from the Fed. Then, the bank loans you money at an even higher interest rate. The difference between their rate from the Fed and the rate they charge you is a huge source of profit. The more loans the banks have on the books, the more money they make.