The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Why Isn’t Anyone Talking About Bank Profits?

On July 14th, 2008, posted in: Uncategorized by

Big Oil” is in the news as gas prices continue to hover in the $4.00 per gallon range. Nobody is happy with the profits earned by major gas and oil companies at the expense of the little guy. “The rich get richer…and the poor get poorer” is the discussion on news reports, at congressional hearings, and most certainly in the break rooms at workplaces throughout our region.

Interestingly, I have yet to hear or witness any prominent discussion among consumers regarding the fact that the banking industry has set record profits year over year over year – for what seems like decades. That might be a stretch, but more years than not in recent times, banks have annually set new profit marks. How come nobody’s talking about this?

Well, I’ll talk about it. Consumer fees continue to increase, and a major portion of bank revenues come from fees. In the interest of fairness, we make fee income too, but not because we charge high fees (ours are some of the lowest you’ll find anywhere).

The difference is that we return the income we make to our members in the form of better services, better rates, fewer fees, fewer account restrictions, more free services, etc. etc. That’s what not-for-profit cooperatives do. The banks…well, they give their profits to stockholders. That’s their motivation every morning…increase stockholder value. Who pays for that increase in value? The little guy. Sort of sounds like “Big Oil” to me.

Wait a second…aren’t banks struggling right now because of the economy? Not according to the 8th Federal Reserve District located in St. Louis. They report that this region’s banks are performing at just under last year’s levels in return on assets (i.e. profitability) for the 1st quarter of 2008. At who’s expense? I think we all know the answer to that one.

No Responses to “Why Isn’t Anyone Talking About Bank Profits?”

Leave a Reply