This article is good reading. The banks are working to stop the reform of this notorious practice. I commented on the article:
There is little doubt that Ms. Feddis and most other banking officials went to the best business schools and all of them had Business Ethics as a required course. What effect did it have when they can set a money trap like this? There is no doubt that banks deserve a fee for an overdraft but this is not a fee, it is a harvest of money from the unwary. When did ethics become optional? And more importantly, how can anyone say this is a legitimate means of business profit with a straight face. jp
This is the article’s address, below.
I received a comment from the author of the article. This is it:
Alain Sherter
11/03/09 |
RE: Banks Seek to Derail Bills to Curb Overdraft Fees
Southwerk–I’ve posed that very question to lots of
people who know more about the banking industry
than I’ll ever know. The answer about precisely
when ethics flew out the window may differ, but
one thing is consistent–it wasn’t always thus.
But somewhere along the line (the ’70s, by my
rough estimation) banks started to change. Certain
ideas started to sprout that changed the business.
The prime directive became profit, not prudence.
And enormous forces were brought to bear on bank
executives to pursue profit no matter the cost–to
consumers, communities and even the banks
themselves.
To be clear, this isn’t to denigrate the profit motive.
It’s only to recognize that certain core values and
ideals shape how businesses operate. And when
those change, mountains move.
If there’s a silver lining, it’s the fact that things were
different once. That suggests the financial industry
can change once more.
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