Monday, January 29, 2007

Hypocracy in the House

The House of our esteemed Congress is trying to pass a bill so Wal-Mart cannot own a bank known as an industrial loan company. It is very much "let us pick on Wal-Mart because everyone hates them and we will look good to our voting public" kind of bill.

Target, for instance, already owns such a bank. Why should Wal-Mart not be able to? Wal-Mart says they want to create such a bank to process credit card transactions and such on their own instead of using a middleman which takes a cut and raises their prices and that they are not interested in running commercial banks for the public at large.

The fear, of course, is that they will change their mind and open Wal-Mart branded banks around the world. And maybe they will, but.... so what? Who will this hurt? Other banks are an obvious choice. More competition and all that. If Wal-Mart tries to undercut Bank of America, Washington Mutual, Wells Fargo, or whatever, they might have to cut fees, increase interest rates on your money in their vaults, or provide better interest rates for loans to stay competitive.

But you know what? I hate banks. I really, really hate banks. They try to nickel and dime you to death. They charge you if you do not keep a minimum amount in the account. They charge you to use certain ATMs. I have a list of possible bank fees from one of my banks that I might face if I do not jump through every single hoop at the appropriate time that that is about 30 items long! And "free checking" is rarely ever truly free.

Frankly, if Wal-Mart wants to compete with these folks, that is something I would very much support. You would not even have to change banks to benefit from the increased competition as the established players will have to cut fees and improve service to stay competitive.

And consider this--if mixing a retail business with a bank is such a bad thing, why are our esteemed members of Congress not trying to pass a bill so Wells Fargo cannot choose to buyout and own Krogers in the future? A bank is allowed to own a retail business, but a retail business is not allowed to own a bank? That is just plain stupid.

This is nothing more than a ploy by politicians to look good by picking on the evil Wal-Mart, but the only person that such a bill will help is the already existing banks--not the consumer. For the average working person out there, this is very bad legislation.


neboros said...

Ryan, why don't you give up the bank and start "banking" at a credit union. I have no fees at the credit union I use and even if don't have sufficient funds in my checking to cover a check they just transfer the amount from an affiliated money market and charge me a measley $3.00. Three dollors these days is about the equivalent of a quarter not too many years back. I have "free" online check pay service. The money saved in postage alone is like getting interest. It surely makes up for the few bounces that lead to the $3.00 charges from time to time. Live dangerously, Run with scissors (remember that one?) Go find a credit union!

N. (Goober's goods houser)

Ryan said...

Actually, I already have an account at a credit union, and they're wonderful. =) Not that it's entirely free of charges, but it's definitely much more reasonable than publicly traded banks.

It's the principle of the thing, though. There is absolutely no good reason to not allow Wal-Mart to open a bank if they want. The only people it *might* hurt are other banks that are evil anyhow. For the consumer, the average Joe, it will only be a GOOD thing.

W&MGrad said...

What? No rants for almost a month? Are you going soft or just being a goober?