The Fed Gov't and Banks.

[Big Blue Machine]

We can't attack banks just because they are profitable. Service charges have been around for a while, yet no one really complained, until say RBC posts $1.2 billion profit. The banks need the ATM fees to install new machines and make their system better. Let business do what they do, leave government to government.

[Mad_Michael]

We can't attack banks just because they are profitable. Service charges have been around for a while, yet no one really complained, until say RBC posts $1.2 billion profit. The banks need the ATM fees to install new machines and make their system better. Let business do what they do, leave government to government.

Are you proposing then to repeal the Bank Charter Act? That's government interference in the market. As you said, lets leave business to business. That Bank Charter Act is just government meddling. Let the banks have a free market - a real one that allows CitiBank to compete on a level playing field. (our bankers would have a heart attack at the thought of it). Canadian banks LOVE regulations that protect their monopoly - they supposedly hate all other regulations. How typical.

Speaking of which, my 'conservative' father always ranted about 'red tape' and 'interference' in the markets. I always said, no problem. We'll get ride of the Central Bank and the SEC first. He never liked that argument at all.

[Riverwind]

Are you proposing then to repeal the Bank Charter Act? That's government interference in the market. As you said, lets leave business to business.

Many things need to be regulated when it comes to banks. However, some things should be left to the free market. No one needs to use ATM machines from other banks - they are purely a convenience. There would be no reason to regulate the fees if people made the choice to boycott ATMs that charged them fees. In fact, I did exactly that when CIBC first started to tack on fees onto a local machine that I used regularly. I even called CIBC and told them that I would never pay the fees. At the time I had hoped that I would be simply one of thousands of Canadians which would fight back a tell the banks where they could stuff those fees.

Unfortunately, Canadians seem to value convenience over cost and many seem to think that the government should force banks to subsidize consumers who are too lazy to find alternatives to ATMs. It is possible and not that inconvenient. I have been doing it for years.

[Mad_Michael]

Many things need to be regulated when it comes to banks. However, some things should be left to the free market. No one needs to use ATM machines from other banks - they are purely a convenience. There would be no reason to regulate the fees if people made the choice to boycott ATMs that charged them fees. In fact, I did exactly that when CIBC first started to tack on fees onto a local machine that I used regularly. I even called CIBC and told them that I would never pay the fees. At the time I had hoped that I would be simply one of thousands of Canadians which would fight back a tell the banks where they could stuff those fees.

Unfortunately, Canadians seem to value convenience over cost and many seem to thing that the government should force banks to subsidize consumers who are too lazy to find alternatives to ATMs.

I don't buy it.

Banks love regulations that protect their turf and their profits. But any other regulations are unacceptable?

That is absurd. Either the banks are regulated, or they are not.

Fact is, banks cherish their Charter status. I have no sympathy for them if they are forced to pay a price for this. That's how the market works.

[Riverwind]

Banks love regulations that protect their turf and their profits. But any other regulations are unacceptable?

You cannot use the fact that other regulations exist as a justification for any new regulation you can dream up.

There is no justification for regulating ATM fees because people can choose to not pay them. If they choose to pay them then it is their fault - not the bank's. It is that simple.

Furthermore, any regulation of these fees would be counter productive because it would encourage banks to close down machines in convenient locations that are only used mainly by customers of other banks. It would also cause the service fees on basic accounts to go up.

[Charles Anthony]

Many things need to be regulated when it comes to banks. However, some things should be left to the free market. No one needs to use ATM machines from other banks - they are purely a convenience.

With what criteria do you decide what "needs" to be regulated and what does not?

[Riverwind]

Many things need to be regulated when it comes to banks. However, some things should be left to the free market. No one needs to use ATM machines from other banks - they are purely a convenience.

With what criteria do you decide what "needs" to be regulated and what does not?

Look at the relative power of the buyer and provider and determine whether the seller has an unfair advantage over the buyer. In the case of ATM fees, the seller has no advantage over the buyer because it is easy to avoid paying those fees.

[Charles Anthony]

Just to clarify: relative market power is your criteria, correct?

[Riverwind]

Just to clarify: relative market power is your criteria, correct?

Yes - but 'market power' has many different aspects that includes economic power and knowledge. For example, consumers have many choices when it comes to getting mortgages for their homes which means there is no need to regulate the interest rate charged. However, we cannot expect most consumers to understand the intricate finance details in mortgage contracts. The details can be used to dupe consumers into paying much more than they think they are paying. For that reason it makes sense to define standard financial terms for mortgages which all banks must offer.

[geoffrey]

Shows we don't have enough competition. Throw out the Bank Act and lets get some foreigners in here that want to sell cheaper stuff to us. Allow mergers as well so that our banks can still compete with the new arrivals.

The bigger problem here isn't a lack of regulation, it's a lack of competition.

And if all else fails, go to President's Choice banking, they have no fees. Unfortunately I do too much stuff beyond their services, but hey, I'm sure it would apply to the majority of Canadians that just get their pay deposited and spend spend spend for two weeks until the cycle starts over.

[Saturn]

There is no justification for regulating ATM fees because people can choose to not pay them. If they choose to pay them then it is their fault - not the bank's. It is that simple.

If your tap water started costing you a buck a litter, would you choose to use it?

[Riverwind]

Shows we don't have enough competition. Throw out the Bank Act and lets get some foreigners in here that want to sell cheaper stuff to us. Allow mergers as well so that our banks can still compete with the new arrivals.

Foreign banks already compete in the market. HSBC and ING are doing quite well. We also have a lot of credit unions and even President's Choice to choose from. IOW: there is lots of competition in the marketplace. It is wrong to assume that competition always produces the market outcomes that you want.

For example, people can avoid ATM fees today but they choose not to. There is no reason to believe that competition would result in these fees being dropped because consumers have already indicated that they don't care that much about them (if they did care they would not pay them).

[Riverwind]

If your tap water started costing you a buck a litter, would you choose to use it?

Holy red herring batman! No one needs to get cash from a ATM machine run by a bank other than the one they deal with. There are many other options available that cost nothing. I have not paid any ATM charges in years and I do use cash regularily.

[Saturn]

Banks love regulations that protect their turf and their profits. But any other regulations are unacceptable?

Of course not. Do you expect anyone to fight regulations that benefit him and support regulations that hurt him?

[Saturn]

If your tap water started costing you a buck a litter, would you choose to use it?

Holy red herring batman! No one needs to get cash from a ATM machine run by a bank other than the one they deal with. There are many other options available that cost nothing. I have not paid any ATM charges in years and I do use cash regularily.

Are you always within a few kilometers of a branch of your bank? Do you have all your bank's ATMs in the country mapped out on your GPS?

And what about the hundred other fees banks charge? Can you choose to not have a bank account?

[blueblood]

If your tap water started costing you a buck a litter, would you choose to use it?

Holy red herring batman! No one needs to get cash from a ATM machine run by a bank other than the one they deal with. There are many other options available that cost nothing. I have not paid any ATM charges in years and I do use cash regularily.

Are you always within a few kilometers of a branch of your bank? Do you have all your bank's ATMs in the country mapped out on your GPS?

And what about the hundred other fees banks charge? Can you choose to not have a bank account?

Well I can say that Canadians aren't too upset with banks otherwise they wouldn't support them. It's not like we have a massive use of credit unions or worse yet sticking your money in a sock.

Not that i'm advocating sticking money in a sock, if people are that upset why continue supporting them?

[Mad_Michael]

Banks love regulations that protect their turf and their profits. But any other regulations are unacceptable?

You cannot use the fact that other regulations exist as a justification for any new regulation you can dream up.

True - the existence of regulations does not provide justification for more regulation.

However, if you flip that one around, you will see my point. That YOU cannot assert that no regulation of banks are warranted when the banks are entirely dependent upon the regulation of the Bank Act to give them their monopoly. Clearly, banks can and are regulated. Indeed, when it comes to the regulation of their Charter, banks desperately desire such regulation.

As far as I'm concerned here, the problem is caused by a lack of competition - which is a direct product of the Bank Act.

Banks can either recieve regulations to make them behave according to political whim, or they can take their chances on the free market (and open up the bank market to foreigners). Banks don't like either choice. Too bad.

There is no justification for regulating ATM fees because people can choose to not pay them. If they choose to pay them then it is their fault - not the bank's. It is that simple.

So, competition and the free market applies to the bank's customers, but not the banks themselves eh? Nice game you got there - protected by the Bank Act.

The banks are protected from competition by government statute. Bank customers are voters. What the voters give, the voters can take away.

Furthermore, any regulation of these fees would be counter productive because it would encourage banks to close down machines in convenient locations that are only used mainly by customers of other banks. It would also cause the service fees on basic accounts to go up.

No it would not.

1. As recent studies have shown, a majority of similar sized banks in other nations (western nations) do not charge these fees.

2. Bank service transactions enacted through electronic kiosks cost the bank a fraction of the cost of a bank service transaction enacted through a teller inside a branch. The banks have introduced electronic teller machines and closed/reduced branches for a strong cost-driven reason here. By charging large fees on electronic transactions that cost very little, the banks cross-subsidise the live services in person in the branch, that although they cost substantially more money, are offered 'no charge'.

On this basis, Canadian consumers and Canadian voters are well within their rights and their interests in demanding satisfaction from the Chartered Banks.

[Riverwind]

Are you always within a few kilometers of a branch of your bank?

No. But that means I have to plan ahead. It is not too hard. I carry a credit card if I run into an emergency. I could also justify paying the ATM charge if I needed cash for some unexpected reason.

Do you have all your bank's ATMs in the country mapped out on your GPS?

Don't need to if I plan ahead. I also can go into any Safeway, Save-On or Loblaws and buy a pack of gum and get extra cash for no additional charge.

And what about the hundred other fees banks charge? Can you choose to not have a bank account?

No. But you can keep those transactions costs low with proper planning too.

[jdobbin]

We can't attack banks just because they are profitable. Service charges have been around for a while, yet no one really complained, until say RBC posts $1.2 billion profit. The banks need the ATM fees to install new machines and make their system better. Let business do what they do, leave government to government.

Exactly what is your partisan attack on the Opposition here? Isn't Flaherty who called on the banks to talk about their bank fees?

[Riverwind]

1. As recent studies have shown, a majority of similar sized banks in other nations (western nations) do not charge these fees.

If there is a study then it is not accurate. I have travelled in most western countries and every ATM I have seen charges fees to people who are not customers of the bank.

2. Bank service transactions enacted through electronic kiosks cost the bank a fraction of the cost of a bank service transaction enacted through a teller inside a branch.

It costs a lot of money to keep those machines stocked with cash.

On this basis, Canadian consumers and Canadian voters are well within their rights and their interests in demanding satisfaction from the Chartered Banks.

Hardly, Canadians should take responsiblity for themselves and refuse to pay the charges. We don't need to regulate this. I dislike this move because the banks will recover the money by raising service charges on accounts and closing ATMs.

[jdobbin]

Many things need to be regulated when it comes to banks. However, some things should be left to the free market. No one needs to use ATM machines from other banks - they are purely a convenience. There would be no reason to regulate the fees if people made the choice to boycott ATMs that charged them fees. In fact, I did exactly that when CIBC first started to tack on fees onto a local machine that I used regularly. I even called CIBC and told them that I would never pay the fees. At the time I had hoped that I would be simply one of thousands of Canadians which would fight back a tell the banks where they could stuff those fees.

Unfortunately, Canadians seem to value convenience over cost and many seem to think that the government should force banks to subsidize consumers who are too lazy to find alternatives to ATMs. It is possible and not that inconvenient. I have been doing it for years.

Some Canadians might not have had the options you did. Go to a small town and there might be one machine from one bank and in the next town a different bank and different machine. Unfortunately, this is the story of rural Canada.

I think it is time for government to open up their banking market, let the banks merge if they want but then let every other bank in the world come here for competition. We have protected the large banking market here for years with the rationale that bigger meant more stable. The protected Canadian market now allows the banks to make forays around the world often unsuccessfully.

There could be issues of anti-trust in Canada to consider as well.

Regardless of what the banks do now, a comprehensive study of banking and finance should be done in Canada.

In any event, it is time for a comprehensive study on banking and finance in the country. Canadians should have the most choice out there

[Topaz]

If your tap water started costing you a buck a litter, would you choose to use it?

Holy red herring batman! No one needs to get cash from a ATM machine run by a bank other than the one they deal with. There are many other options available that cost nothing. I have not paid any ATM charges in years and I do use cash regularily.

Are you always within a few kilometers of a branch of your bank? Do you have all your bank's ATMs in the country mapped out on your GPS?

And what about the hundred other fees banks charge? Can you choose to not have a bank account?

Perhaps Canadians should go back to dealing with the banks and the tellers and make the bank rehire their lay off employees because of the ATM machines. Instead of making all that money, they would be paying it out as wages.

[Riverwind]

You say this:

Some Canadians might not have had the options you did. Go to a small town and there might be one machine from one bank and in the next town a different bank and different machine. Unfortunately, this is the story of rural Canada.

And then you say this:

I think it is time for government to open up their banking market, let the banks merge if they want but then let every other bank in the world come here for competition.

You dreaming if competition from foreign banks will banks more accesible for rural Canadians. The foreign banks would go after the profitable urban market. If you really care about ensuring low cost services for rural customers then you should be supporting the existing system.

[Charles Anthony]

The foreign banks would go after the profitable urban market. If you really care about ensuring low cost services for rural customers then you should be supporting the existing system.

Should foreign banks be outlawed from operating in Canada?

For example, consumers have many choices when it comes to getting mortgages for their homes which means there is no need to regulate the interest rate charged. However, we cannot expect most consumers to understand the intricate finance details in mortgage contracts. The details can be used to dupe consumers into

I beg your pardon? What kind of apology is that for government regulation?

We can not expect consumers to understand the intricate details of millions of things.

Let me re-ask my question: With what criteria in the world do you decide what you can expect consumers to understand and what they can not understand?

The details can be used to dupe consumers into paying much more than they think they are paying. For that reason it makes sense to define standard financial terms for mortgages which all banks must offer.

Be more explicit.

Are you saying that the "government" should force financial institutions to offer specific rates and products regardless of the demand or supply??

If everybody is illiterate or lazy or stupid or any combination of the three, I fail to see how we should have a government regulate a finance industry.

[jdobbin]

You say this:

Some Canadians might not have had the options you did. Go to a small town and there might be one machine from one bank and in the next town a different bank and different machine. Unfortunately, this is the story of rural Canada.

And then you say this:

I think it is time for government to open up their banking market, let the banks merge if they want but then let every other bank in the world come here for competition.

You dreaming if competition from foreign banks will banks more accesible for rural Canadians. The foreign banks would go after the profitable urban market. If you really care about ensuring low cost services for rural customers then you should be supporting the existing system.

I don't see how the old system helps the rural areas. Nor does it make sense to protect the bank charter to keep large banks when they are rationalizing their own branches and closing some altogether.

Foreign banks would indeed go after the profitable sector as they have done in Britain. But then it forced *all* the banks in the nation to reduce their bank fees. This did not make them unprofitable if that is what you are suggesting it would do for Canada.

I suggest that rather than let the banks just close their rural branches as they have done that they be forced to look for a buyer first. In recent years, many rural banks have been taken over by credit unions. I think this is a trend that should be encouraged more.