Fewer Banks = Fewer Choices,
To their shame, Congress has passed and President Clinton has signed S.900, a law which permits banks, insurance companies and stock brokers to merge.
This ignores the lessons of the Great Depression: the Glass-Steagall Act prohibited bank-broker mergers, not only for the safety of their customers, but to protect financial institutions from themselves, i.e, to stop banks from 1929-style gambling with the people's deposits, and to make this country's economy safer. The Glass Steagall Act worked; the United States has had a very stable economy since the Great Depression. But that may now change: bigger financial institutions may take bigger risks with your deposits. The potential collapse of a giant such as Citicorp-Travelers may make the savings & loan bailout look tame. You the taxpayer will pay for foolish bank gambling.
Fewer banks means fewer choices for consumers and more monopoly fees. US PIRG documented that recent mergers resulted in the bigger banks charging the biggest fees to consumers. When local banks were merged out of existence, the remaining large banks did not have to worry about competition.
CLNJ says the main results of mergers and bank deregulation since 1981 were to reduce the deposit interest we received from 5% to 1%, and to increase credit card interest we pay to 20%- quite a spread for bank profit!
Congress Sold Your Precious Privacy
Do you think your bank account information or your health insurance data is private? Think again! S.900 permits the new monster institutions to "share" all your private information, not only with their new affiliates, but also with business partners who want to sell you products. The Minnesota Attorney General sued a large bank which gave a telemarketer access to consumers' credit card numbers, and the firm submitted false charges for goods never ordered! Another bank has been fined for selling its customers to a firm which practiced stock fraud. What's next? If your health insurer is owned by a bank, it will be easy to reject you for a mortgage on the grounds of poor health.
Consumer groups urged that banks should not be allowed to violate customer privacy, unless the customer specifically authorized it ("opt-in"). Instead, Congress sold consumers down the river. Under the law, the merger monster need only tell you about its nefarious non-privacy policies once per year, and the consumer must opt-out by mailing a notice to the monster. Even if you opt-out, the merger monster may sell your most private data to a non-affiliated business partner in the course of a "joint agreement." In other words, Congress seems to approve a "joint" plan to invade consumer privacy!
Consumer groups are gearing up to fight this. All consumers ought to "opt-out" in the interim, and call on Congress to protect our privacy!
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