Bank Fees and Number of Unbanked Rise
6th October 2012
Some of the higher fees and higher unbanked numbers surely is due to the recession. But some of the rise in the number of unbanked and underbanked consumers is directly the result of the rising bank fees, which has pushed marginal consumers out of the banking system and deterred bringing in new consumers. And the rising bank fees are primarily the result of Dodd-Frank, the Durbin Amendment’s price controls on debit card interchange fees, and new rules on overdraft fees. Of course, both of these phenomena were entirely predictable (and predicted).
The problem with attempts to constrain the workings of economic markets through government regulations rarely work as intended, because markets almost always find a way around them. This is because markets arise when two people want to trade, a fact that politicians and their entourages never seem to grasp intellectually. If two people want to trade, they will find a way to trade, whatever the law might say; and those who make laws need to take this into account if their laws are to work, which they never do.
It’s really depressing living in a country run by stupid people. Unfortunately, that appears to be almost all of them.