Economic Experts Weigh In on How to Help the Middle Class

Banks are obliged to conduct their business with clarity and for profit. That is their role, not giving out grants. They participate in communal ways. But you asked only about "big" banks so you narrowed it to those whose activities are more regional or national or global.

Rev. Jim Wallis, president and CEO of Sojourners

Rev. Jim Wallis, President and CEO of Sojourners

The biggest banks do have an ethical obligation to help alleviate the pain from a crisis they helped to create. After being extended such "grace," because of the fear of an economic meltdown, the banks then failed to extend that grace to anybody else; creating a modern "parable of the unmerciful bankers." Knowing no shame, they then decided to use that public money to make themselves even richer, and then pass out billions of dollars in bonuses to their top executives--while middle-class families were left to fend for themselves. Job loss, unsustainable mortgage payments and exorbitant bank fees are just a few of the problems facing the middle-class. I would suggest four steps that the big banks should take.

First, begin lending again. The big banks have drastically cut lending to small businesses, one of the primary job creators in America. The banks received billions in financial assistance, but instead of helping small businesses, they've used the financial assistance mostly to increase their own wealth. That's just wrong and not in the spirit of how the bailouts were intended.

Second, the banks need to begin to modify mortgages for families facing foreclosure at a much faster rate. Currently, the loan modifications have been taking place at a painfully slow pace – leaving millions of American families in financial distress.

Third, the banks need to curtail their exorbitant overdraft fees. These fees primarily hit the middle class and working poor, who are struggling to make their accounts balance. I was on a radio show a few weeks ago when an unemployed man called in to say he'd miscalculated his bank balance by $15. But because of that slight overage, his bank charged him $60 in fees! Again, that is just wrong. Banks received $38 billion in overdraft fees last year – over half from debit cards.

Finally, and this may be the biggest issue, big banks should actually support common sense financial regulation for the common good, including a robust and independent consumer financial protection agency to make sure that the risky and abusive financial practices that helped precipitate this crisis do not happen again. That would be in the best interests of the country, but also in the best long term interests of good financial institutions. But up until now, the big banks have spent hundreds of millions lobbying against reform.

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