NDP Calls For Ban

[geoffrey]

There is no point in having cash in the bank if you have to pay the fee and others don't. Poor people on fixed incomes should remove their money from the banks.

Can you pay your mortgage in cash?

[madmax]

Boohoo - a business makes a profit. So friggen what?

If you want to reduce bank profits then the gov't should teach people how to manage their money properly.

So when I go to the bank and they manage my money properly, they are reducing their profits?

Why do I not believe that the Government can tell people how to manage their money in a banking institution and that this will lead to a reduced Bank Profit?

[madmax]

There is no point in having cash in the bank if you have to pay the fee and others don't. Poor people on fixed incomes should remove their money from the banks.

Can you pay your mortgage in cash?

You can be poor, have a fixed income, and your mortgaged paid off. You could have been an excellent money manager, and for some reason, your toast later in life.

You can be poor, on a fixed income, and only have a Rent to pay, as owning a house has never factored into your economic situation.

Banks don't need to hold these peoples money either. Like you said, it is a drain on the bank, and a greater drain on the fixed incomes and poor people.

As for the analogy of the person with a high Mortgage, little cash flow, and high service charges. Maybe Flaherty has the answers for them, that would be his constituency.

[Riverwind]

So when I go to the bank and they manage my money properly, they are reducing their profits?

Banks make money off people that can't manage their money. If everyone managed their money properly then many of the services that we take for granted today would not available or they would cost a lot more. Anybody who complains about high service charges has options available to them - it is not the fault of the banks that they do not choose those options. The gov't has no business trying to protect people from their own incompetance.

In any case, banks that make healthy profits are a good thing for the economy. The last thing we need are a bunch of barely profitable banks because they would have to constantly be bailed out by the taxpayers. We have seen this happen in the US, Japan and now China.

Another thing to consider: many retirees depend on the dividend income coming from bank profits. So if the gov't actually managed to reduce bank profits to something that anti-business zealots considered to be 'reasonable' then you would see many retirees hurt. The fallout would be worse than the fallout from the income trust decision.

[madmax]

The gov't has no business trying to protect people from their own incompetance.

Gov has no businsess protecting people.....

but....

The last thing we need are a bunch of barely profitable banks because they would have to constantly be bailed out by the taxpayers. We have seen this happen in the US, Japan and now China.

It's ok for government to protect banks.

[madmax]

So if the gov't actually managed to reduce bank profits to something that anti-business zealots considered to be 'reasonable' then you would see many retirees hurt. The fallout would be worse than the fallout from the income trust decision.

Flaherty is an "Anti-Business" zealot? He is the originator of the comment that the NDP jumped upon.

Flaherty is the instigator in the income trust reversal?

Are you suggesting he resign?

[Riverwind]

The last thing we need are a bunch of barely profitable banks because they would have to constantly be bailed out by the taxpayers. We have seen this happen in the US, Japan and now China.

It's ok for government to protect banks.

The gov't has no choice but to bail out unprofitable banks because a major bank that collapses can caused widespread economic chaos. I would rather that was not the case because I don't like it when the gov't bails out businesses either. That is why the country is better off with banks that have healthy profits.

[Riverwind]

Flaherty is an "Anti-Business" zealot? He is the originator of the comment that the NDP jumped upon.

Flaherty is uniformed. US banks charge larger ATMs fees than Canadian banks and UK banks are world champions at screwing their customers even if they get a break on ATM fees. Once Flaherty gets the correct information he will likely distance himself from that comment. If he doesn't then he deserves the label 'anti-business zealot'.

[madmax]

That is why the country is better off with banks that have healthy profits.

A stable banking industry is a must.

What is a healthy profit?

[geoffrey]

That is why the country is better off with banks that have healthy profits.

A stable banking industry is a must.

What is a healthy profit?

Whatever their customers decide.

[Riverwind]

A stable banking industry is a must. What is a healthy profit?

A healthy profit is whatever is necessary to ensure the banks can deal with unexpected crises. CIBC had to shell out 2.5 billion to settle for its wrongdoings with Enron -> CIBC was easily able to handle that loss and still remain a healthy company. A less profitable CIBC would have likely had to be bailed out by the taxpayers after taking such a huge hit.

I agree that the system seems to give banks an unfair advantage but that is why we must ensure that banks stay as Canadian owned corporations. This means their entire profits are taxable in Canada and money paid in profits must go to Canadians which can also be taxed. Banks complain bitterly about not being allowed to merge or the restrictions on ownership. That is price they have to pay for their special position in the Canadian economy.

I think the system as it stands now is a fair balance. Starting to meddle in how the banks charge fees simply upsets that balance.

[madmax]

Flaherty is uniformed.

No he is the finance minister, not in the military.

Just kidding..... uninformed.

US banks charge larger ATMs fees than

Well, you have two solutions. The segment here, that believe in opening the banking system, might see this happen if the idea of market forces exists in banking competition.

from Canada.com

But at a time when more banks are charging noncustomers more money to use their ATMs, some consumers are getting a break. Many credit unions and smaller banks are joining surcharge-free ATM networks to make up for not having large networks of their own to compete with national banks.

And one big bank, U.S. Bank, a part of Minneapolis-based U.S. Bancorp, expanded its network by buying the MoneyPass surcharge-free ATM network, giving its customers free access to 10,000 ATMs in 48 states, including 5,000 U.S. Bank-owned machines.

"We're in a constant dog-eat-dog fight for market share," said Rick Hartnack, U.S. Bank's vice-chairman and head of consumer banking.

Greg McBride, senior financial analyst with Bankrate.com, said U.S. Bank's move "goes against the grain" of what other big banks are doing.

"This is a move to differentiate themselves from their primary competitors that have very large ATM networks themselves," McBride said.

Or for those whom believe in the protected market for Canadian Banks, the only hope for reduction in ATM fees, is in government dictating to the banks, through regulation and not affecting the banks in a manner that might adversely affect their "healthy profits" or more importantly, endanger the banking system.

[Riverwind]

Or for those whom believe in the protected market for Canadian Banks, the only hope for reduction in ATM fees, is in government dictating to the banks, through regulation and not affecting the banks in a manner that might adversely affect their "healthy profits" or more importantly, endanger the banking system.

As I have said before: people have choices. Nobody is forced to use an ATM that is not run by their bank. Therefore, any move to regulate those fees is completely unjustified.

[madmax]

A stable banking industry is a must. What is a healthy profit?

A healthy profit is whatever is necessary to ensure the banks can deal with unexpected crises. CIBC had to shell out 2.5 billion to settle for its wrongdoings with Enron -> CIBC was easily able to handle that loss and still remain a healthy company. A less profitable CIBC would have likely had to be bailed out by the taxpayers after taking such a huge hit.

You don't bank with the CIBC do you? I do, and shouldn't. I have thought very much of leaving CIBC because of their fraudulent activities. Why should I allow a bank to gouge me on service fees, and then commit fraud, and cover the cost of their illicit activities with my money?

I do understand your definition a healthy profit.

I agree that the system seems to give banks an unfair advantage but that is why we must ensure that banks stay as Canadian owned corporations. This means their entire profits are taxable in Canada and money paid in profits must go to Canadians which can also be taxed.

This argument could be made for any Canadian Company. Except that other industries do not have regulations that give them unfair advantages, just the opposite. What's the big deal about whether a bank is Canadian or Foreign owned, compared to Foresty, Manufacturing, etc.

[madmax]

Or for those whom believe in the protected market for Canadian Banks, the only hope for reduction in ATM fees, is in government dictating to the banks, through regulation and not affecting the banks in a manner that might adversely affect their "healthy profits" or more importantly, endanger the banking system.

As I have said before: people have choices. Nobody is forced to use an ATM that is not run by their bank. Therefore, any move to regulate those fees is completely unjustified.

Then wouldn't I (and even the poor money managers mentioned earlier), want to have Banking Competition like exists the US? Where these fees are being dropped. Compared to the Social protectionist modell? If Flaherty is determining that Competition is causing the Banks in the US to drop their fees, and he is very much a Free Trader, wouldn't it make sense for him to open up the market and allow these fees to be dictated by the market?

[Riverwind]

What's the big deal about whether a bank is Canadian or Foreign owned, compared to Foresty, Manufacturing, etc.

The gov't could let any one of those companies go bankrupt without worrying about trigging a major economic crisis. That is why banks are different.

If Flaherty is determining that Competition is causing the Banks in the US to drop their fees, and he is very much a Free Trader, wouldn't it make sense for him to open up the market and allow these fees to be dictated by the market?

The cut throat competition in the US is also what caused the savings and loans crisis. It cost US taxpayers $150 billion US to clean that mess up.

[madmax]

The gov't could let any one of those companies go bankrupt without worrying about trigging a major economic crisis. That is why banks are different.

If they go bankrupt, they are bad money managers and shouldn't be running a bank. I don't believe addressing ATM fees is going to determine whether a bank is going to have an economic crises. Infact, some here have suggested that poor people using the ATMs actually cause the banks to lose money.

Do you disagree with this?

That said, with competition, there would be more banks, and the loss of one inefficient bank would make little difference. Why is it that other companies in Canada shouldn't be protected the same way. A HUGE segment of the manufacturing sector, left Ontario in the early 90s with free trade. Hundreds of thousands of people became jobless, and it took 3-7 years for the service sector to pick up the slack, and specific manufacturing to recover or return. This caused a huge economic crise in Ontario.

Freeing the Banks to the markets shouldn't be a problem

Do you not believe in the Global economy and free trade?

[madmax]

The cut throat competition in the US is also what caused the savings and loans crisis. It cost US taxpayers $150 billion US to clean that mess up.

The Savings and Loans regulations, are different from Banking Regulations in the US.

[Riverwind]

That said, with competition, there would be more banks, and the loss of one inefficient bank would make little difference.

We have lots of competition to banks today - they are called credit unions. There is no reason to believe that adding more foreign banks into the mix would change anything. This bigger issue is allowing foreign banks in would lead to end of the Canadian ownership restriction on the major banks.

A HUGE segment of the manufacturing sector, left Ontario in the early 90s with free trade. Hundreds of thousands of people became jobless, and it took 3-7 years for the service sector to pick up the slack, and specific manufacturing to recover or return. This caused a huge economic crise in Ontario.

Unemployement in a specific sector is troublesome but not an economic crisis.

Freeing the Banks to the markets shouldn't be a problem

Too many Canadians don't realize that virtually every profitable corporation in the country is being bought out. This takes most of the corporate tax revenue and profit out of the country. Furthermore, it leaves Canadians who are interested in investing in Canada with fewer choices. This means that the money that Canadians made selling those companies will also leave the country in search of suitable investments. As it stands right now the TSE is going to be reduced to a few financial and telecommunication companies in the next 20 years. If ownership regulations were removed even these companies would disappear and the TSE would become nothing more than a venture capital exchange.

Do you not believe in the Global economy and free trade?

There is no such thing as free trade. We have managed trade.

[bush_cheney2004]

Half of Canada's ATMs are "white label" independents. I always suspected that Taliban Jack was a commie at heart, but this is just blatent pandering for votes.

[Ricki Bobbi]

Half of Canada's ATMs are "white label" independents. I always suspected that Taliban Jack was a commie at heart, but this is just blatent pandering for votes.

Those are the ones that will either disappear or have to be exempted from this little charade.

Either way they will be gone.... They need the fees to survive.

[margrace]

There is no point in having cash in the bank if you have to pay the fee and others don't. Poor people on fixed incomes should remove their money from the banks.

Can you pay your mortgage in cash?

Some people do pay in cash. When our friend sold his farms to Old Order Amish they paid in cash. When he went to the local bank where he was well known and had banked for many years there was great consternation. Banks evidently don't like cash payments.

[Riverwind]

Here is a good article that illustrates how absurd this topic is: http://www.theglobeandmail.com/servlet/sto...y/National/home

Canadians have become used to paying the $6.95 monthly system-access fee for their cellphones. They'll still fork over $10 for a doctor's note. And dispensing fees at pharmacies? Not a problem.

But when it comes to paying $1.50 for using another financial institution's automated banking machine, Canadians still go a little, er, loonie.

In other words, banks could simply increase fees in other areas if they are forced to operate their ABMs for free. British banks essentially offer free machine transactions, and absorb the costs if their customers use a rival bank-owned machine. Even there, the rise of fee-charging white-label machines has been swift, and now account for about 44 per cent of all British machines.

Bruce Cran, president of the Consumers' Association of Canada, said that as long as consumers still have the option of walking into their bank's branch and making the same transaction without being charged a fee, it shouldn't call for the amendments to the Bank Act, currently under review, that Mr. Layton is proposing.

[geoffrey]

Half of Canada's ATMs are "white label" independents. I always suspected that Taliban Jack was a commie at heart, but this is just blatent pandering for votes.

Those are the ones that will either disappear or have to be exempted from this little charade.

Either way they will be gone.... They need the fees to survive.

How are you going to get that extra $20 at the bar then!?!?

Some people do pay in cash. When our friend sold his farms to Old Order Amish they paid in cash. When he went to the local bank where he was well known and had banked for many years there was great consternation. Banks evidently don't like cash payments.

Obviously. I'd be hesitent to desposit hundreds of thousands of dollars of cash for a couple reasons. First, it's illegal to carry more than $10k on your person at any time. Second, the risks of counterfit, racketeering, money laundering... it's just huge.

Try to buy a car in cash, it's possible, but they don't like it. Banks, lenders and most importantly the government want to see where money is coming from and going to. Massive cash payments are very undesirable.

Banks rely on a 'money trail' to protect all of society from these practices. A police report should have to be filed for the deposit of that money regardless of whether he was a long-time customer.

[sharkman]

Unfortunately, Jack Layton and the NDP may not actually know what they are talking about. Or maybe they know a little bit, and a little bit of knowledge is dangerous. John Turley-Ewart has a story in today's National Post, and this is some of what he's found. The story is not accessable on the net, so I've typed out the highlights.

It turns out that the idea of service charges accounting for 5% of bank revenues ignores profits. An NDP press secretary later admitted that 5% of revenues comes out to 32% of bank profits. So scrapping IBM charges would have a disasterous effect on the industry. Also us, because anyone who has mutual funds no doubt has some money invested in bank corporations, whose stocks would drop like a stone if charges were cancelled.

Next, the figure of 420 million the NDP came up with as what Canadians pay every year in ATM charges. It turns out that this figure comes from a 2006 AP story about the U.S. ATM market. That story got its figures from a Florida web site called Bankrate.com, which does no research at all on Canadian banking. Americans paid 4.2 billion in 2006 for these charges. Does that number look close to the 420 million amount the NDP came up with? Try dividing it by 10, because that's what the math whizzes at the NDP office did. No Canadian research was involved, no surveys or studies, just grabbing numbers out of their behinds and then getting red in the face about it in front of the cameras.

A PricewaterhouseCoopers study from 2003 found that the average bank owned ATM fee in Canada was .58 cents, while in the U.S. it was 1.35, or more than twice the Canadian amount. So in other words the numbers the NDP came up with are more proof that they need to stay away from the reins of power. If they do this poorly with mere statistics, how fast would government revenues disappear?