Banks in the US are back to raising user fees for simple banking operations.
Granted, as the banks claim, they are private businesses and entitled to try to make a profit.
The problem is that the macroeconomy depends on liquidity of the banking sector to turn personal savings into investment spending.
Consumer advocates say they worry that the fees will push people out of banking and toward more expensive services, like payday lenders and loan sharks.
“A significant part of the population will be squeezed out of banks because they can’t afford it,” says Nancy Bush, founder of banking research group NAB, and columnist at SNL Financial, “and that is absolutely wrong.”
Recently I made a visit back to the US. Without any dollars, I visited an ATM machine. I had to pay a fee of $5 for a modest $100 withdrawal. That was the last time I used an ATM there.
People discouraged from saving in the financial system means there will be less spending, demand in the marketplace, fewer jobs, and less ability for the government to improve growth with fiscal or monetary policy.