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Archives for March 2001

Bigger Banks Mean Bigger Fees

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Published March, 29, 2001

Reinforcing the need for limits on corporations’ size in order to maintain competition, the Federal Reserve again has documented that large banks (assets over $1 billion) charged significantly higher fees to customers than small banks (assets under $100 million), and that fees at multi-state bank chains exceeded those of single-state banks.

The report, “Retail Fees of Depository Institutions, 1994-99,” highlights findings from the Fed’s annual survey of bank fees. Congress has required the surveys since 1989, and since 1996 the data has been separated by bank size and whether it was a single-or multi-state institution.

Among the report’s findings for 1999 data: the average monthly fee for a non-interest checking account with a minimum balance was $5.62 at small banks, compared to $8.20 at large banks. Stop-payment orders averaged $13.92 at small banks and $21.50 at large banks. The required minimum balances were substantially higher at large banks than small ones. Large banks also imposed higher and more frequent ATM surcharges. The report also found higher rates at multi-state banks compared to single-state operations.

Why, then, do large banks continue to gain market share? Largely through control of ATMs. In many areas, a handful of large banks control most of the ATMs, and the easiest way to avoid surcharges is to open an account with one of the dominant banks. This creates a perverted form of price competition whereby large banks may gain market share by raising ATM access fees–another example of the vast difference between a market economy and US-style corporate capitalism.

Unfortunately this important information has seen little exposure in corporate or independent media. 2001 may be the last year of the Federal Reserve’s annual report unless Congress enacts an extension or permanent status for these reports. As the only source of data on the consumer impact of banking consolidation and deregulation (and information that would be virtually impossible for any non-governmental organization to compile) these reports should be continued.

This article was based on a report by New Rules Project.

Related News: Independent Pharmacies Beat Chains on Price in New York Study

In December, 2002 prescription price survey conducted by the New York Statewide Senior Action Council in Albany, New York, concluded, “The lowest prices for generic drugs were found at an independent pharmacy. . . contrary to the belief that chain drug stores with high volume purchases would pass on the savings to customers.”

For example, prices for Lovastatin, a cholesterol medication, ranged from $84.50 at the independent Lincoln Pharmacy to $199.97 at Rite Aid. The online pharmacy Drugstore.com offered Lovastatin it for $99.99, Wal-Mart for $136.62, and Target for $146.39.

The Home Town Advantage e-Bulletin, a free Email newsletter, is the source of much information here. See NewRules.org to view a sample or subscribe.

The Biggest Obstacle to Equal Representation for Women in Congress Isn’t Sexism, It’s Money

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by Jennifer Rockne 
March 2001

Sexism and extremism steamrolled tradition when women who were in line for House committee chairs this session were slighted because their male counterparts were deemed “more qualified” (read: more conservative).  The majority party normally chooses committee chairs based on seniority, but another norm was maintained instead–the 107th House now boasts committees all chaired by white men.

Nearly as dismal, this Congress also includes a record number of women, but they still occupy a mere 13 percent of seats in both the House and Senate.

With the overall progress women have made to dispel social stigma and sex discrimination, why is their representation in Congress so minimal?

The greatest factor in getting and keeping Congressional seats is money.  As long as we accept the 1976 Buckley v. Valeo Supreme Court decision that equates spending money to influence elections with free speech, the majority of Americans will continue to be underrepresented.

The Buckley decision stated political campaign spending could not be regulated, and contributions could be limited only in certain narrow ways.  It legitimized the practice of corporations and political action committees funding politicians, political parties, and campaigns of their choosing, and reaping legislative favors.

The problem is not that women are unable to fund their campaigns.  Women candidates presently raise campaign money on a par with men and have since the 1980s, in part

The road to incumbency is rugged—and expensive. Escalated campaign costs have made fundraising a daunting task, preventing most potential candidates from even considering running for office and ensuring “serious” candidates are those with access to money.due to contributions from at least 46 PACs and donor networks that primarily contribute to women candidates or whose donors are female.  The problem is that incumbents typically raise more than twice the amount of money, as do challengers, allowing them greater media access and other exposure to the public.

Incumbents raise funds more readily than challengers simply by the advantages of holding office. According to Washington insider and former Cabinet member Joseph Califano, House members typically start fundraising for re-election immediately after they are elected, and most senators easily spend one-third of their six-year terms fundraising.

 Historically, women have fared equally well in running for open Congressional seats against non-incumbent men, but fared much worse challenging male incumbents, a trend illustrated by the results of the 2000 election:  only two of 33 women major party candidates challenging male House incumbents were deemed winners.

Preliminary spending reports indicate just three challengers defeated incumbents for Senate seats in 2000 without outspending them, and lower-spending challengers won just four House seats.

Despite their slight representation in the Congress, women have played a vital role with respect to issues such as sex discrimination that entered the law books because those who had firsthand experience championed them.

Title IX, that denies federal funds to schools that discriminate based on sex, might not exist today if a woman in Congress hadn’t saved it from near-defeat. Women led the way for federal laws on equal pay and funding of daycare for poor women. Historically, women in Congress raise issues of health, poverty, family, and social concerns that often are dwarfed by military or foreign policy issues.

While the corrupting influence of money in government is not exactly a revelation to Americans, most current reform proposals merely seek to lessen the damage to democracy and fail to challenge the faulty premise at the root.

Those interested in changing the rules must recognize that the Supreme Court tends to react to popular movements and the social climate–as it did in response to civil unrest during the Civil Rights Era—rather than lead the way. Government officials, whether appointed or elected, rarely create the necessary changes to enable a government worthy of the name democracy—an organized public will.

Whether our goal is achieving equal representation for all Americans, or simply a less corrupt government, reversing Buckley v. Valeo and dispelling the money-equals-speech dogma must be part of the foundation of change.  Doing so may not ensure fairer representation, but it would help return politics to its root, polites or citizen, and open the board to a greater diversity of players—one that looks more like the constituency it purportedly represents.   

Jennifer Rockne is the Assistant Director of ReclaimDemocracy.org