What is a Christian Response to Banking Injustice: Fees and Hidden Costs?

Banks provides an easy target to criticize. Perhaps it’s because they have money and we, the common people have little. Maybe it’s because we lump them into the “Wall Street Fat-cats” category that tops the nation’s most hated list. I believe there is another reason: They trigger the “somethings afoot switch” that resides deep inside me. That feeling similar to when one walks on a buy here pay here used car lot like the one in the first Transformers movie. The feeling that the words coming out of the bank representative’s mouth do not match the reality that you will soon face with their services. A recent editorial in the NY Times proposed that one such reality resides in bank fees for account overdrafts. They cite two findings from research groups:

many banks fail to fully explain their overdraft policies and some have bullied customers into opting in, warning that “your debit card may not work the same way anymore.”… [and]… more than half of customers with overdraft “protection” did not believe that they had opted into the coverage.

Now, one could argue that it is the consumer’s responsibility to know what products they are purchasing. However, the bank has a responsibility to bring clarity to purchase. Call it fair product labeling. When there are other options available, and the banks scare people into taking the $35.00 per overdraft protection, it’s a sign of greed on the part of the banks. I would suggest it is greater than greed, it is usury. As blogged in an earlier post, this bank activity is yet another sign that the foundation of capitalism, a shared ethic that places the needs of others above personal gain, has deteriorated into virtual obscurity.

The Christian response to the bank’s actions is not to just live within one’s means and thereby avoid such fees, although that is good advice (e.g.Proverbs 3:9-10) . Nor is the Christian response to pull all funds from the bank and bury the money in the backyard, although some do (Matthew 25:24-27 demonstrates this is not best practice). I believe the Christian response to the bank’s actions can serve as a reminder of the many ways we take advantage of people with our own fees and hidden costs. One such example is time: the amount of time take from other people that is unexpected. For example, how many times have we been in conversation with someone face-to-face and answered an incoming call, making the person in front of us wait until we are done? We might think it rude, if that same scenario happened in person instead of over the phone. However, we do it with our phones often. This is only one example; there are many more. The point is that we should be aware of others needs and place their needs in front of our wants. That avoids usury and greed. It creates in us an awareness that the world is not about serving us, but our serving others (Galatians 5:13, Mark 10:42-45, I Corinthians 4:1-2).



Filed under Community, Ethics, Spirituality, Theology

10 responses to “What is a Christian Response to Banking Injustice: Fees and Hidden Costs?

  1. This is interesting. I agree that banks too often do not do their do-diligence when it comes to explaining their fees. Just handing me a piece of paper casually after opening an account is not the most ethical banking practice and just feeds customer suspicion.

    However, when it comes to a free checking account I think the bank has the right to charge me over draft fees. After all, if I don’t have the money in the account they don’t have to front me the money until my next paycheck. Granted, $30-$35 per overdraft is at minimum bordering usury. It is probably similar to what Cash-Advance people do but banks do it with a tie on and a million dollar smile:) Still, I think there is another dynamic at work here. If they only charged $5 per overdraft would people be more or less likely to use it? Maybe I am giving the banks too much credit here, but I see it at least equally the case that they have my best interest in mind with such a high fee. I am much less likely to swipe my card knowing I will go over if the Fee is $30 or more than if it is only $5. They are trying to help me live within my means and weekly paycheck. The fee is high but its to make sure I only do it if I absolutely need to. The customer can also abuse the overdraft protection if the fee was too low.

    Is my response understanding you correctly? I look forward to your thoughts.

    • I believe one could make a reasonable argument that anything but a free checking account is usury since the bank is making money off of your deposits. Therefore, to charge a monthly fee to you is gaining income from you in two ways (off your money and the monthly fee). When you add the overdraft fee, now the bank has your deposit with no risk whatsoever. They have collected a monthly fee to offset any loss from an overdraft and they charge you (and me) a $35 overdraft fee. At my bank, which agrees to move money from my saving to my checking in $100 increments, this is tantamount to a 30%+ interest rate for the use of their money for one day. Maybe the better solution would be to decline the check card. Banks don’t want to do this because they get a cut of the merchant fee from the card (Visa, MC, etc). I agree if you are going to have overdraft, it is a service so expect a charge. The point is in how banks present this service and many times it is not in the most ethical manner, because of the profits that are at stake. Either way, I believe analogy to the Christian life applies.

      • Yes that would be possible to argue. The problem we have is that banks are tied to wall street and therefore have to post earnings each quarter or the investors get mad. Wall street has set a certain standard for businesses (and lets be honest, banking is a business) in terms of their quarterly profits (thus returns for investors) and how much they have in various kinds of assets, etc. Granted, most traded businesses’ money is not static in the bank but is working for them in a multitude of ways. But, how much is enough to have?

        Maybe I am straying off the topic at hand……

  2. Tom Littlejohn

    As I am right now – today – in the middle of my company’s technology effort to disclose fees on retirement plans to employers and their employees, this topic is timely. As we humans get more advanced, we often fail to appreciate the COST of our advancement. Much of that cost is COMPLEXITY. Before we had smart phones or the Internet, we didn’t have to understand or count minutes, our gigabytes downloaded per month, roaming, secure vs unsecure WiFi hotspots, etc. So, while we can easily point out when a bank or cell phone company does us wrong, or isn’t clear in their communications, we often fail to remind ourselves that we have a choice whether to have a cell phone, Internet, satellite/cable TV, 401k investments, Certificates of Deposit, etc. While there are certainly ample examples of companies being downright evil to their customers, I believe that our complaints are often mis-placed. We need to look in the mirror, and accept that our advancements often place more demands on us to read, understand, and track ever increasing bits of information to ensure that I am a good steward over my affairs.

  3. Tom, you have a point. However, I think one can argue that while we may have the choice not to get a cell phone or other types of cultural advancements, what kind of a choice is it really when we realize that without some of these things we cannot function in our present society. We always have to weigh the cost benefit factors and control our use of certain things but we live in a much different world then before the internet and cell phone. A child in school almost cannot do their homework without a computer. In fact, educators project that eventually, even public schooling will all be done on the internet.

    • Tom Littlejohn

      Craig, I’m not advocating that anyone do without a cell phone or debit card. I’m just pointing out the (often overlooked) connection between human “advancement” and complexity. We demand ever-increasing sophistication in our services, but we want them simple enough to explain to a five-year-old, and when the inevitable misunderstanding comes along, we are prone to blame the service provider for misleading us. How many of the “terms and conditions” that are put in front of us do we read, line by line, word by word? Why are those terms and conditions so long and complicated? Often because it is difficult to regulate the behavior of sinful human beings.

  4. Tom, I understand your connection of advancement to complexity, but I believe your example of the terms and conditions suggests that we have not even moved them out of the lawyer’s office much less into kindergarten. I think that is the heart of the issue. I have read some of those conditions line by line and word by word. I still did not completely understand all that was in the agreements because of expressions, phrases, and jargon used (and I am well past 5 yrs old!). Compounding the documentation issue, is the fear/sales pitch by some businesses employ to get product sale up. I don’t believe it is an “either or” with regard to complexity and advancement. I would suggest that there are many examples that point to otherwise (eg. iEverything by Apple, manual vs. auto transmission). However I do agree with your notion of personal responsibility. That too, is a huge issue in our society, but there are times when personal responsibility is used as a mask for tactical corporate injustice that yields windfall profits. I am simply suggesting that when a shared social ethic is absent, both the buyer (through lack of personal responsibility) and the seller (through vague agreements, and hidden fees) decline to put the needs of society over their own personal/corporate gain.

  5. Tom Littlejohn

    I see what you are saying and can agree with most all. Certainly there are lots of predators roaming. Regarding Apple and complexity, let me offer up the following news story to add a current example to the mix. (Have you liooked at your iTunes terms lately?). http://abcnews.go.com/technology/t/blogEntry?id=16180658

    • Yes, read about Apple’s app issues, that very thing almost happened to me when my son was playing a game on my iPhone. We backed out before the purchase was confirmed. They definitely have issues. I tried to read my iTunes agreement during the last update, b/c one of my digital movies expired before I could load it. I gave up trying to find information in the agreement. As far as complexity and advancement with regard to Apple, I was thinking of primarily hardware.