Another Sign That Something Is Amiss

TW: Decades of technological progress, free market evolution etc. and we end up with our commercial banking system charging higher fees to handle cash than the neighborhood "check-cashing" store that most of us tend to observe with derision. These kind of things make me want to crack open a Das Kapital book to investigate whether we have missed something.

From Economist:
"...some banks are annoyingly, and quietly, increasing their fees.

Last week, Citigroup Inc.'s Citibank started charging some customers a new $10
"overdraft protection transfer fee" to transfer money from a savings account or
line of credit to cover a checking-account shortfall. Citibank had already
raised foreign-exchange transaction fees on its debit cards and added minimum
opening deposit requirements for its checking accounts. Over the past year, J.P.
Morgan Chase & Co.'s Chase, Bank of America Corp., and Wells Fargo & Co.
have boosted the fees they charge noncustomers who use their automated teller
machines to as much as $3 per transaction

.A 20% increase in bounced cheques and overdraft fees at some banks is expected by the end of 2008. Such fees account for 90% of banks consumer fee income. Bigger banks often charge higher fees.

Last week’s New York Times Magazine, had a great article on cheque cashing stores. It’s often assumed that these stores, which cash cheques and offer payday loans, exploit the lower income individuals who tend to use them. They would be better off, it's stated, using a traditional bank. But the article points out that the high overdraft and bounced cheque fees incurred by lower income traditional bank customers turn out to be much higher than what one might typically pay at a cheque cashing store. Customers also appreciate the relative fee transparency at the cheque stores. That may be why so many poor people shun traditional banks..."
http://www.economist.com/blogs/freeexchange/2008/11/the_cost_of_banking.cfm