Tom’s Banking Bable Class101

As most of you who read my blog know, I hate corporations that pay little respect to the people, the environment and our laws. I read many articles that tell tails, that promote the legitimacy of Money Changers, and articles that dispel the myths of Banking in our modern day culture. There is really only “black and white” when choosing sides in this argument. You either love Banks, or you hate them. I hate them. I hate them because they are just like the Pay Day Loans companies, or the Cheque Cashing outlets that you see popping up in every poor neighbourhood across Canada, and they are design for one purpose: to take your money. Sure they allow you to transfer a Bank Note instead of Cash. I mean, would you feel safe walking around with your pay cheque in dollar bills in your pants pocket? But, are you willing to pay the fees for that service? How far are you willing to go before it starts to make sense just to have the cash instead of a costly Bank Note? So, I invite you to read this article below, then think about how much you should deal with a Bank!

Please note: This that is a 2004 on-line article, as some of the fees talked about have increased as much as 200 percent in 2007.

Canadian banking fees: Hit the consumer
By Jason Hanley
Consumer Report.
All the major Canadian banks made huge profits in 2003. Royal Bank led the group with net income of $3.005 billion. Bank of Nova Scotia followed with $2.477 billion. CIBC and Bank of Montreal posted “modest” profits of $2.063 and $1.825 billion, respectively.

Now, there’s no crime in running a profitable business. Unfortunately, most of the bank’s revenue comes from the least fortunate people. Let’s take Royal Bank for instance:

Royal Bank had total gross revenues of $15.7 billion. Of this, $10.937 billion was generated from loans — in other words, money taken from people who obviously don’t have enough money and need to borrow it.

The bank was then kind enough to redistribute $5.452 billion as deposit interest — in other words, money given to people who have so much money they can afford to have it sit around in bank accounts.

The remaining $5.485 billion from the loan interest was of course retained by the bank for operations expenses, like executive salaries and stock options, for instance.

A further $1.078 billion comes from the much-hated “service” fees, which sometimes don’t even involve receiving a service. The Royal Bank doesn’t even list their fees online. Their website states, “please consult the Personal Banking Accounts – Features and Fee brochure at your nearest RBC Royal Bank branch.”

The Bank of Montreal is less shameful and lists their fees. Here are some of the worst:

Items returned non-sufficient funds (NSF) – $30.00 – YES, thirty dollars!

Stop payment – $12.50

Foreign currency cheque deposited to Canadian dollar account – $5.00

Overdraft Transfer Service, Per transfer (fee is in addition to any debit transaction fee) – $5.00

Incoming Wire payments – $14.00 – this is just to receive a wire transfer. Sending is a minimum of $15.00+

All of these items are in addition to the monthly bank account fee which is often $5 – $15 a month or $60 – $180 per year

Information Sources – Original Article:
Progressive news

Information sources:
– Perspectives on the Canadian Banking Industry / PWC
– Royal Bank Investor Relations
– Bank of Montreal – Other Services and Fees
– Why it is safer to put your money under your bed than in a bank. These “services” cost the bank next to nothing. They are almost pure profit — often taken from people who can afford it the least.

Banking costs are taking up a higher and higher percentage of the income of people who can afford it the least. Meanwhile, this money is being redistributed to those who already have much more than they need.

If this trend continues, there will be a huge cost to society. Banks need to stop taking from the poor and giving to the rich.

Story originally featured on Canadian Content on Tuesday December 7, 2004

Source: Canadian Content December 5th, 2007

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