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Press Release September 18, 1998 |
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WASHINGTON - In a letter to the U.S. Senate Friday Consumer groups are rallying support for basic banking accounts to help "the little guy" fight sky-rocketing bank fees, offering lawmakers another chance to do the "right thing" on bank fees after a measure stamping out double charges on ATM surcharge fees failed.
"The Senate is about to get lucky: they have a second chance to do the right thing for the 'little guy' who wants to avoid the myriad fees that clutter their checking accounts," said Mary Griffin, insurance counsel for Consumers Union. "An industry that is supported by the American taxpayer should meet the banking needs of all Americans, not just the wealthiest among us. No one is asking for a handout here, just an option to stuffing money under the mattress."
At issue is a modest provision to require banks to offer low-cost basic banking accounts that avoid huge bank fees. These accounts would require lower initial deposits and minimum balance requirements, more reasonable service fees in exchange for limits on transactions. Although this initiative passed the Republican-controlled House as part of the massive bank restructuring bill known as H.R. 10 and enjoys support from some big banks like Nations Bank, powerful members of the banking lobby were successful in stripping it out of the bill before it cleared the Senate Banking Committee last week.
Consumers Union, Consumer Federation of America, U.S. Public Research Group and Ralph Nader signed a letter to the Senate asking for lawmakers to vote to restore basic banking when it comes before the full Senate, perhaps as early as next week. The version passed by the House requires those banks that operate under the new financial services holding company structure and take advantage of the new and expanded powers offer something in return: low-cost basic banking accounts.
"Skyrocketing fees and minimum balance requirements are squeezing consumers' pocketbooks," said Frank Torres III, legislative counsel at CU. "Lawmakers have a chance to show whose side they are on: the little guy or the powerful banking lobby."
It is estimated by the Federal Reserve that 48 million American households regularly keep less than $1,000 in their checking account. Many of these families cannot maintain the $750, $1,000 or more in balances that are often required to avoid fees. That means nearly half of all American households who stand ready to benefit from basic banking accounts. At a time when banks are enjoying record profits, families, particularly those with limited resources, deserve a break from the billions in fees that are squeezed out of them for basic bank services, according to the consumer groups, who pointed out that 12 million un-banked households also stand ready to benefit from such reforms.
Letter to the Senate
Fact Sheet
