No. Free markets require a lot of impossible things to work efficiently. Are people entirely rational? Would a rational person ever overdraft without necessity?
Do people have perfect information? Do people even know what's in their accounts? Do people even know the fee schedule?
Competition with banks just means having a fee schedule that extorts your own customers better than the other banks can, while keeping the customers complacent, perhaps by having ATMs everywhere, increasing the chance that folks can overdraft.
It hasn't The problem is that without government guarantees, a lot of people lost their money (under the 1920s free market, then calle laisse faire, mold) when banks folded. We have protections. But, overdraft fees need to be reigned in with more laws, not fewer. America is the land of American capitalism, not fasce style free market capitalism so promulgated in the last 30 years by the cult of Ayn Rand.
Only if the consumer demands it. I did my part. I dumped BofA almost a decade ago, and moved all my accounts to a local bank. I haven't had a fee since! But the majority of people just put up with excessive fees from giant corporate banks, instead of forcing them to have more ethical practices.
The Free Market is a two way street - if the consumer doesn't do their part, then the business might take advantage.
One of our tennants is constantly bouncing checks. Like yourself - she blames the bank for these fees when the true cause is her poor money management skills.
The last time I paid an overdraft fee was over 15 years ago.
In fact I have no idea of what my bank's overdraft fees even are - because this information is irrelevant to people who can properly manage their checking accounts.
According to the FDIC, there were 8,430 FDIC-insured commercial banks in the United States as of August 22, 2008.
How's that for competition?
Those are extreme situations,,,, most people have their checking linked to their savings and never have a overdraft charge.
You just don't like capitalism.
In a free market if you don't like the banks overdraft policy then you can go to a different bank.
The bank must be pleasing its customers to have that much in overdraft charges.
But I'm sure you just hate profit, and actually call profit greed, and you want the government to regulate and control private sector business.
Just like you want the government to regulate and control you to.
What about government greed is that bad too?
Like when the government makes more profit on the gasoline taxes then the oil company makes in profit.
Not as long as banks know they are Too Big to Fail--they will do whatever they want and keep digging in your pocket-either by fees or tax bailout.
If idiots do not write checks for money they do not have, the banks would not get the overdraft fees.
Only if it was a truly free market and only if the media did their job and reported these things to the public.
quite possibly the account holders would learn to balance a checkbook.....>
