The recent spate of bank mergers has the networks concerned. So
concerned that on April 13, the announcements that Bank of America
was merging with Nations Bank and that Bank One was merging with
First Chicago led ABC World News Tonight, CBS Evening News,
and NBC Nightly News, a rarity for a business story. But all
except the latter ignored key arguments that the mergers would be
beneficial to bank customers.
Peter Jennings began ABCís coverage by asking: "Does bigger mean
less competition, which means less reason to service the customer,
especially those with less money?" Correspondent Betsy Stark then
pointed out that "banks say with size comes efficiency. Back-office
operations like data-processing and billing get cheaper as the
customer base gets bigger. Plus, they say, only financial giants
will have enough money to invest in the electronic future of
But Stark wasnít buying it. She argued that "there is evidence
that bigger has not been better for bank customers," namely that
"over the last few years, as banks have merged at a feverish pace,
bank fees have become noticeably fatter. Starkís conclusion: "All
these fees helped banks rack up record profits last year, while
mergers have helped them trim costs. Theoretically, in a competitive
market, at least some of those lower costs should have been passed
on to consumers. But thatís not how the game has played out so far."
Dan Rather introduced CBS Evening News coverage of the
mergers by noting that their impact "will be felt by tens of
millions of Americans for better and for worse." Ray Bradyís story
then focused on the "worse."
Brady ran a soundbite from Ken Gunther of the Independent Bankers
Association, who warned: "When the big are getting bigger, I think
you can be sure that someone is going to pay the piper. And itís
going to be the man on the street thatís going to pay the piper in
worse service and higher fees." Brady ominously brought up the
specter of the Great Depression: "Todayís deals cap a fifteen year
trend of bank deregulation, and the undoing of laws originally
enacted to prevent a repeat of the bank failures of the 1930s. This
latest consolidation of banking power represents the biggest and
boldest moves away from those laws."
NBC began its coverage with the same take as ABC and CBS.
"Experts say these banking mergers are leading to the creation of
so-called financial supermarkets, which will be able to handle
everything from your checking account, to your credit cards, to your
mortgage, to your insurance, to your stock portfolios," reported
correspondent George Lewis. "But, do people really want that?"
A soundbite from Ed Mierzwinski of the U.S. Public Interest
Research Group provided the alleged answer: "Well, bigger is
actually badder. Big banks mean bigger fees for consumers. In fact,
Nations Bank and Bank of America are two of the most fee-gouging
banks in this country."
But NBC was willing to allow another independent viewpoint some
air time. In an "In Their Own Words" segment, banking analyst David
Barry noted the mergers would bring about "greater geographic
convenience. So you could live in Florida, move to Texas, move to
California, and never have to change your bank."
He said that "people are always concerned when they see big
banks, theyíre going to see higher fees, or higher mortgage rates,
and the fact is some banks charge higher fees and some lower. I
think what it really means for the big banks is they can offer
different kinds of service and convenience."
He pointedly added that "we all complain about fees, but none of
us really notice the fact that you can access your bank seven days a
week, 24 hours a day. And the fact is, for a lot of products like
credit cards and mortgages, rates are pretty competitive these days.
Thatís a function of consolidation."