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Durbin & Miller Want To Make Switching Banks Easier

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Senator Dick Durbin and Representative Brad Miller plan on introducing legislation that would make it easier for you to change banks. Durbin, as you know, is the one who lent his name to the law that capped swipe fees. A cap on those fees, along with various other legislative moves, has led many banks to start introducing various other fees – from Bank of America to Citibank.

Now Durbin, of Illinois, and Rep. Miller of North Carolina plan to introduce legislation that would force banks to make it easier for you to switch banks. They look to the FDIC’s quick turnaround after bank failures as a model for how this new system would work. Personally, I think this is a great idea but I think it’s a unfair for the government to tell banks they need to implement this. I don’t think they should be required to make moving banks easier.

As it is, it’s not terribly difficult, you just have to keep diligent records. It might not be instantaneous and it will require work, but it’s not “hard.” Putting a man on the moon is hard. Driving to work in the morning during rush hour can be a pain but it’s not hard. Changing banks is like driving to work. Honestly, I think there are better things for our legislators to work on.

Thoughts?

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20 Responses to “Durbin & Miller Want To Make Switching Banks Easier”

  1. What’s so difficult about switching banks that it requires Congressional legislation? Haven’t these people screwed up enough stuff already? I could switch banks tomorrow if I wanted to with no problems.

    Durbin and Miller, please leave us alone. You have already driven up bank fees enough with last batch of ill conceived legislative. Please spare us any more acts of kindness. Our pocketbooks can’t take any more of your shenanigans.

    • cubiclegeoff says:

      And our society can’t take any more of the banks’ and financial industries shady practices and greed which have been a major reason we are in the situation we’re in.

      • tom says:

        That and consumer greed, wanting houses and crap they can’t afford.

        Mortgage backed securities wouldn’t exist w/o help from us.

  2. It’s not difficult to switch – but it can become a hassle if you have online bill pay set up and direct deposits, or have accounts connected to a debit card.

    Banks know that the more stuff like that you are hooked into – the less likely you’ll be to switch.

    I guess in the end it’s all about how much the new fees tick you off, and how big of a procrastinator you are.

  3. cvargo says:

    I am against more government.

  4. Thanks for posting about this!

    The seven most dangerous words in the English language: “Why, there ought to be a law!”

    Why, with all of the other pressing issues facing the nation, that someone would even waste time THINKING about a law to make switching banks easier is beyond me. It’s not rocket science!

    More dangerous is the size of banks. I just posted on the size of some European banks, that are LARGER than the entire Gross Domestic Product of the country that they’re based in. (www.DollarMusings.com) At least our TBTF banks aren’t quite THAT big yet.

  5. Glenn Lasher says:

    Well, I’m not sure this is needed, but I can see where they are coming from. If banks behaved as though they were subject to the threat of going to the competition, they might behave better.

    …but the only thing that prevents people from going to the competition is that it is a big effort. I should know; I’ve done it, moving my chequing and savings accounts from HSBC to a small credit union. I still have two loans out with my former bank, but I didn’t see the point in moving them as I’m already paying them down ahead of schedule.

    Probably in the next month or so, I will be doing the same thing with my Mortgage, because my current mortgage bank, M&T, have pissed me off. It’s all for the best, though, because I will save money on the refi.

    If the lawmakers want to make switching services easier, the ones they should concentrate on are utilities with contracts: telephone, internet, wireless, television, etc. Any of these would be far more responsive to customer complaints if leaving didn’t carry the threat (to the customer) of an early termination fee.

  6. cubiclegeoff says:

    I don’t see the need for this. I don’t know what some banks charge to cancel an account and everything, but I’m sure some of the charges are ridiculous. If they are, I think this should be dealt with. But if they’re reasonable, it’s not that big of a deal to switch accounts. The only problem may be on companies that have bill pay set up with them, rather than through your bank. I’ve found this to be a hassle, as I’ve switched my credit card for a bill online, but you also have to call because the switch online didn’t actually do anything, which didn’t make sense (I’m looking at you Verizon).

  7. mannymacho says:

    I agree. This just looks like legislators taking advantage of the public’s current hatred against banks to get their name on another bill. There are a million other things that are more important right now, but they continue with the blinders on…

  8. tom says:

    The only thing that should be outlawed is a cancellation fee. Other than that, GET OFF MY LAWN!

  9. freeby50 says:

    I haven’t tried switching banks lately. It doesn’t seem like its something that would require legislation to ‘fix’. But I don’t know how difficult some banks have made it. *shrug*

    On the other hand I don’t think government is evil for suggesting such regulation either. THe banking industry is heavily regulated for very good reasons. As far as I’m concerned they could use even more regulation. Maybe not this regulation exactly but I’m hardly on Team Big Bank.

  10. Brian says:

    This is about adding more federal government jobs then it is about making it easier to switch banks. A new federal law means more regulators to see and monitor the process. In 40 +/- years of living around this country I have never had a problem closing or opening a account at any bank/credit union.

  11. panchito says:

    you are good on finance, don;t get on politics, because it’s nasty.
    What do you think about the “occupy Wall Street”. I bet you have not comments because the banks pay you right?
    Just think about the 99% that is poor in america.

  12. Dennis says:

    With all due respect this is typical of the people that we elect to represent us. Concentrate on the small do nothing things like this and ignore the fact that this country is going bankrupt and millions of people are out of work. Since when did it become difficult to switch banks?

  13. Chris says:

    Little Dickey “Durbin Fee” Durbin should go somewhere and sit down. He’s done enough damage.

  14. skylog says:

    i agree with most here, i just do not see the need for this. that said, the whole banking system is just a mess. they lose card fees, fees get jacked all over, government looks for more rules…etc…it is not going to end well.

  15. Travis says:

    The banks have already proven that they can’t manage their own affairs without driving this country off a cliff. It was the government that stepped in and prevented the economy from collapsing.

    I don’t understand all this “leave the banks alone. Don’t meddle in their affairs.” Oh bullsh*t. This isn’t Domino’s Pizza we’re talking about. These mega banks have the ability to completely destroy the economy. There needs to be more regulation, not less.

    It’s like giving car keys to a 10 year old and then being surprised when they crash the family minivan. Naturally, you bail them out, but then, you give them a stern talking to and tell them not to crash again, and hand them the keys. That’s pretty much what’s happening with the financial sector in this country.

  16. Travis says:

    Switching banks is actually quite a time consuming hassle. And the banks know that. They’re counting on people to eat these $5 fees instead of spending hours and hours switching to a local bank or credit union. They have the customer by the balls and they know it. The proposed legislation is to try to ease that. And honestly, more people should be switching to a local bank.

    It’s actually a nice way to shift some of the power from these “too big to fail” monstrosities to local banks. Spread the money around, so to speak.

    Think about it. Think about what these banks are saying with these fees. It’s not about these banks not being able to keep the lights on. It’s about maintaining their insane profit margins. It’s a giant middle finger to their customers, many of which have been loyal to them for decades. And of course, it’s a regressive fee, most affecting customers who maintain a balance of less than $1,500.

    I support the legislation.

  17. thunderthighs says:

    This legislation sounds great to me. I am curious if the naysayers bothered to click to HuffPost article and read the bullet point-summary of the legislation at the bottom.

    • Shirley says:

      I just now did that, thanks to your direction.

      I found this line interesting:
      Prohibits banks from blacklisting consumers for failing to satisfy bank-generated fees assessed to an account at time of closure.


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