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Big Banks: What's Wrong with Big Banks in America? Walmart Filling a Void with Its New Bluebird Card
Pinnacle Digest writes: The largest banks in America were forced to take on exceptional risk following the near complete financial collapse the industry suffered in 2008. Five years later, with their coffers stacked full with taxpayer dollars, one would think these banks would help serve the very people who ultimately have and are expected to continue bailing them out. Sadly, this has not been the case, which John Browne explains in his latest article.
Big banks are there to facilitate and carry out the Fed’s process, which consists of accepting, holding and distributing a never ending supply of fiat money. The larger commercial banks have acted as the central banks' de facto distribution system, and as a result have grown ever larger while accepting progressively greater risks.
Large banks remain, firmly entrenched and supported by government guarantees. It is for this reason Browne argues, that these banks see little reason to provide cost effective services for retail clients. The mindset these banks have is that with government backing they are the only game in town and customers will trust them with their money no matter how badly they treat them.
Most people with bank accounts in the United States will likely agree that in recent years banking fees have gone up while the level of service has gone down. What happens when the government is failing in an industry? If, assuming it hasn't banned its competition and isn't running a monopoly, private enterprise steps up and proposes innovative solutions.
Recent moves by retail giant Walmart provides one example and some much needed competition to the Big Banks in America.
The Federal Deposit Insurance Commission (FDIC) recently pointed out that some 51 million Americans are "under banked". Worse, about 17 million are "unbanked". 17 million people in America don’t even have a bank account. This implies a massive potential need for banking services for individuals at the lower end of the financial totem pole.
Walmart is outsmarting the banks to ensure its consumers, the low end market, keep spending at its stores. Browne explains that to provide a service to these potential customers, Walmart has announced an agreement with American Express to issue a prepaid debit card entitled 'Bluebird'.
Learn more about Bluebird here
This card is meant to enable less well-off consumers to purchase products from Walmart without surrendering their paychecks to a bank, thereby exposing themselves to high banking fees, or to put their purchases on conventional credit cards, which are notorious for high fees.
America's failing financial system is another example of government overextending its power and influence to the point it renders a sector uncompetitive.
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