Attorney General Eric Holder wants to clear up something he said months ago: We only thought he said that some U.S. banks are too big to jail. What he meant was the exact opposite of that, he would like us to know.
Holder was testifying at a super-fun House Judiciary Committee hearing on Wednesday about the Justice Department's many ongoing nightmares, from spying on the Associated Press to the Internal Revenue Service hassling the Tea Party. During the hearing, Holder was asked about comments he made at a Senate hearing in March about big banks.
Back then, Holder said: "I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large."
To a layperson, that certainly sounds like Holder was publicly confirming what others in his Justice Department had already admitted, to The New York Times and to Frontline documentarians: Charging big banks with crimes might blow up the economy real good-like, so it dare not be done.
On Wednesday, Holder backtracked furiously:
Let me make something real clear right away. I made a statement I guess in a Senate hearing that I think has been misconstrued. I said it was difficult at times to bring cases against large financial institutions because [of] the potential consequences that they would have on the financial system. But let me make it very clear that there is no bank, there's no institution, there's no individual who cannot be investigated and prosecuted by the United States Department of Justice.
And in case that was not clear, Holder added: "Let me be very, very, very clear. Banks are not too big to jail. If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought."
All righty, then. But the record is also very, very, very clear that not a single bank has been charged with any crime arising from the financial crisis. And not a single big bank has been charged with any crime involving money-laundering, though some big banks have copped to letting drug dealers and terrorists move cash through their branches. And only one bank has been charged with a crime so far in the still-unfolding Libor scandal -- UBS's Japanese subsidiary last December pleaded guilty to one charge of fraud, the first such charges against a bank since 1989.
There is no doubt that the Justice Department can prosecute banks and bankers. In fact, Congress wrote laws giving it just that power. So far, however, there is no evidence that the agency will ever actually use that power.
1. Comparison shop
Make a list of the fees and rates at your current bank, then look at what others have. Start with our rates page, where you can compare <a href="http://www.moneytalksnews.com/rates/" target="_hplink">interest rates</a> on checking accounts, money market funds, savings accounts, mortgages, and other loans. But don't forget to factor in other conveniences, like hours and the proximity of branches. Don't overlook <a href="http://www.moneytalksnews.com/2010/09/30/7-reasons-you-should-join-a-credit-union-this-week/" target="_hplink">credit unions</a>, either. They often offer higher savings rates and lower loan rates than the megabanks. Search for them at the <a href="http://www.creditunion.coop/" target="_hplink">Credit Union Association</a> site.
2. Negotiate with your current bank
If you have a mostly happy history with your current bank, take the best offer from your comparison shopping and throw it back at them to see if they'll cut you a break on fees or hike your savings rates. As a longtime customer, you have a little leverage.
3. Get a "switch kit"
If you do decide to leave, ask your new bank or credit union for a "switch kit." These often come with step-by-step instructions, contact info, and forms to transfer services like direct deposits and automatic payments. But even so, <a href="http://defendyourdollars.org/press_release/cu-report-switching-banks-hard-for-consumers" target="_hplink">Consumers Union says</a>, "Re-routing automatic payments and deposits into a new account can take four to six weeks."
4. Don't close the old account yet
You may be in a rush to conclude business with your old bank, but it's important to make sure your transition is seamless - missing payments, misplaced deposits, or delays can end up costing you. Leave a cash cushion to cover payments you may have forgotten. Wait three months to close the account completely, or at least until you're absolutely sure all's well. If there are fees associated with transferring your balance - Consumers Union says to expect "$7 to $10 for certified checks and from $24 to $30 for a wire transfer" - you might skirt them by moving money gradually, withdrawing up to allowed limits and depositing the cash to the new account. Using cash more frequently than plastic can also help.
5. Watch the new account
Keep a keen eye on your new account, checking it daily for the first few weeks. Be sure all your regular deposits are coming in and all your bills are being paid from the proper account. You also want to get familiar with your new bank's quirks, like how long deposits take to clear and how it lists your balances and transactions, to avoid trouble.
Make sure you go over all the paperwork relevant to your new account, so you don't get tripped up by processes that differ from your old bank, hidden fees, or upcoming changes. And keep a list of these, since you may want to re-evaluate your new bank sooner rather than later - especially if the government actually does make it easier to switch. Beware of switching again too soon: Consumer Reports says several banks charge $25 fees for closing within the first six months.