Bank Fees for the "Poor"

The French government is considering capping banking fees charged to the poor as part of a new poverty plan.

French government looking at capping bank fees on poor

As a former banker and avowed Capitalist but, a compassionate conservative, I have mixed feelings about this.

The average person doesn't understand how banks work.  The brevity of the post requires that I postpone that discussion to another time, but in brief, deposits of customers provide the base from which loans are made to other customers.  Accounts that carry little, or no balance actually cost the bank money.  Labor involved in handling returned items, statements, etc. more than offsets the small amount that might be made from lending the fractional amount allowed to others.  In fact, fractional lending requirements often mean that, based on the average balance of the small account, they add nothing to the lending base of the institution.

On the other hand, excessive fees make it more difficult for the low-balance depositor to gain any ground on his financial position.  Many of the small depositors are poor money managers to begin with and don't understand the reasons their small deposits are "taxed" with what appear to be large fees.  They need education, not penalties.

Perhaps the answer lies in banks offering basic classes in balancing ones checkbook, the impact of compounding interest and the basics of how the financial system works rather than penalties for poor money management.  Ignorance should be replaced with knowledge, not reinforced with anger-causing actions.

I oppose state mandated behavior in this area, but I see the need for action.