Sen. Reed accuses big banks of gouging customers

Accusing the largest banks of using high interest rates to help their investors, Sen. Jack Reed, D-R.I., wants to know why bankers are increasing interest rates on loans, but not on savings accounts.

“Soaring interest rates are hitting Americans hard. Customers are paying more and more for loans,” Reed wrote, in a letter to seven of the largest banks this week. “It appears the biggest banks are exploiting the higher interest rate environment to benefit their executives and shareholders, not the ordinary Americans whose deposits provide the funding necessary for those banks to operate.”

Where Credit Unions Stand

Credit union trade groups have long argued that while for-profit banks are designed to reward investors, credit unions are member-owned and use their funds to benefit members.

In fact, the personal financial website Bankrate said this week that “savers looking to maximize their earnings from interest should consider turning to online banks or the top credit unions, where rates are typically much better than those offered by traditional banks.”

 

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