MEDIA ALERT:

Bailout Impact on Banking Fees for Consumers:  Will Fees Rise As They Did After the S&L Bailout?
Economist specializing in bank fees urges Fed monitoring be included in pending legislation: available for comment now

WHAT:  Will financial institutions pass the bailout costs on to consumers, beyond taxes? Will legislation to be passed this week by Congress include watchdog efforts to protect the consumer?
If Congress thought it important after the 1989 S&L Bailout to watch out for the consumer, why not now in 2008, with this bigger, more devastating bailout?

The Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA) stipulated that the Federal Reserve had to report annually on whether or not the cost of the S&L Bailout would be passed onto the consumer in the form of increased fees, rates, and balances for financial services.  Will the same be true now?

WHO:  Economist and CEO Mike Moebs of Moebs Services (www.moebs.com), an independent economic research firm in Chicago, can speak knowledgeably on increases in bank fees after the S&L bailout and discuss the fee implications for consumers of the current bailout proposal. Moebs’ firm has been collecting fee and pricing data from banks for more than 20 years and Mike has insights and viewpoints pertinent to the current crisis.

BACKGROUND ON FEE IMPACT AFTER S&L BAILOUT:  After the 1989 S&L Bailout, Congress required the Fed to track and report fee increases from 1990 to 2002. In 1998, fees charged by financial institutions deviated from CPI and started to grow rapidly. Overdraft fees increased from $15.73 on average to $22.88 on average, or 45.5 percent from 1997 to 2002, according to Moebs’ research.  The Consumer Price Index increased from 160.5 to 179.9 or 12.1 percent in that same period.  Fees increased almost four times as fast.

To avoid a double whammy of citizens paying for the bailout as a taxpayer and then again as a consumer, Congress and the Treasury should require the Fed to track and report information on prices of retail financial services.

WHERE:  Moebs Services is based in Chicago.  Mike is immediately available for telephone interviews and understands reporter’s time constraints and deadlines. 

HOW: To set up an interview, please call Pat Harden at 510-635-4150(office), 415-637-3509 (cell) or Kim Kellogg at 510-325-3195 (cell)