The Troubled Asset Relief Program (TARP) bailout gave American banks more than $350 billion. The federal stimulus program handed them another $580 billion and the Federal Reserve also threw $1.5 trillion their way. Consider the other various government programs trying to keep our banks afloat and so far they’ve received $3 trillion. But we’ve committed an additional $9 trillion, just in case.
This is a staggering amount of money. It’s too large to mean anything to most Americans, who might be struggling to pay a few hundred dollars in rent. So here’s a more reasonable number: $5 a month. That’s what Bank of America will begin charging its customers to use their debit cards next year.
Apparently $3 trillion (with another $9 trillion promised) just isn’t enough. Times are tough, after all. Three trillion dollars just doesn’t go as far as it used to. Without an extra $5 a month from all of its customers, Bank of America might not survive.
It’s not just Bank of America. Citibank is also looking at charging debit card fees and other national banks might soon join them. It might seem strange that more than $3 trillion isn’t enough, but banks have some heavy expenses.
Bank of America’s chairman and CEO Kenneth Lewis earns a $1.5 million salary. Including bonuses, he earns $24.8 million each year. An additional six Bank of America top executives take home $51.9 million total. Citigroup Inc. is in a similar predicament.
Together, their top executives earn $70.5 million. That’s only half a million for their CEO, but $19.4 million for their chief financial officer. Most of that money comes from bonuses — he only earns $400,000 in salary. Next time you hear that corporate salaries are going down, remember it’s all in the bonuses. So it’s understandable that they need that extra $5 a month from their customers, they’re barely scraping by.
We needed to loan the banks $3 trillion so that they could lend it back to us. The banking crisis meant Americans couldn’t get loans to buy houses and cars or to invest in small businesses. So we had to give the banks our money, in order for them to give it back to us at 9 percent interest, compounded monthly. When the government gives money to major banking corporations (so their CEOs can earn millions of dollars loaning that money to American citizens) we call that the free market, and celebrate it. When the government gives money to our citizens, we call that socialism.
Worst of all, the banks aren’t giving us back our money. Only a small portion of the TARP loan has been paid back. It is harder than ever to get a loan for a house or car. Bank of America promises its mortgage holders that they will review their cases, while a Bank of America subsidiary forecloses on them. And now they want to charge us another fee just so we can have access to our own money.
With all that we have given the banks, why aren’t we regulating them? Why did we give them $3 trillion with no strings attached? Our congressional representatives are in the pockets of their corporate campaign backers. We cannot expect the government to step in and do its job when it comes to regulating our banking industry.
But there is something the average American can do: Take your money out of corporate banks. Put it in local credit unions, which keep the money in the community and offer better interest rates with better business practices. Invest it in your home, your family or your business. Take your money away from banks like Bank of America.
Save your $5 a month.