The Free Press, Mankato, MN

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October 21, 2009

Your View: We need protection from banks' practices

By Justin Brandt, North Mankato

Is unregulated capitalism different from totalitarianism?

Greedy banks “sold” mortgages to unqualified buyers. Mortgages were then bundled and sold to Wall Street. As the economy slowed and real estate values fell, defaults climbed, causing a chain reaction meltdown of our financial system.

This is an oversimplification, but wouldn’t you agree under-regulated banks are somewhat responsible for our current economic woes? Billions of dollars have gone to banks to help them “weather the storm” of their own making.

Congress is finally shining a light on banks’ usurious overdraft fees. In the past accounting year, consumers were charged $38.5 billion in overdraft fees, which is up 38 percent from five years ago.

Imagine trying to get by on unemployment checks, living with minimal balances in your checking account. Then, a check you wrote for $200 causes your account to be overdrafted by $5.

The bank will pay the biggest check first. Why? Because now it can charge a $35 overdraft fee for each of the 3, 4 or 5 small debit card uses the same day. The result is monumental penalties (up to 10 times $35 a day) to those who can least afford it.

Banks can get away with these outrageous charges, so they do. Will banks look out for their customers’ best interests, be fair and equitable? Apparently, only if it’s required by regulators. Banks only look out or their short-term bottom line.

Let Congress know we need to be protected from the predatory practices of our friendly local banks.

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