Senate bank bill could allow 'too big to fail' banks to grow even bigger

The chain grocery store where my wife and I shop has a bank in it. There's the frozen food section, the bakery section, the pharmacy and ... the bank. It's not even a particularly large grocery store, but there it is. A bank. With a vault, a sit-down area and everything.

I'm not sure how common this is, but it certainly represents the trend here which appears to be rapidly nearing a ratio of more banks than people. Or at least, more banks than McDonalds, Subways, Starbucks, Walmarts and Targets -- combined. That's not an exaggeration. Within short walking distance of my very suburban neighborhood, there are four banks not including the one in the grocery store. Two of those banks are directly across the street from each other.

And, by the way, there are fewer community banks and credit unions here.

With that in mind, I had no idea that there were local laws regulating how many branches a bank can open in a particular states. Oh, and, according to Ryan Grim, Congress and the Treasury Department is trying really hard to undermine those laws.

The Senate's banking reform legislation contains a line item, called "de novo branching," which would overrule local laws and allow large banking chains to ostensibly open as many branches as they want.

When the measure came up in the House Banking Committee, Congressman Alan Grayson (D-FL) successfully demanded that the measure be dropped. The Treasury Department, which requested the provision in the first place (ARG!), didn't object. You can probably guess why. Because it suddenly appeared verbatim in the Senate version of the bill.

So here we are: cracking down on "too big to fail" while also allowing banks to grow larger and more powerful.

Post script. One of those banks just charged me $40 for an overdraft on an account I don't use because a monthly service charge was suddenly added to the account and subsequently withdrawn, dropping my balance to -$6.99.

This same bank received $300 million in TARP funds.

Good people.
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