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Originally Posted by TacticalEvilDan  Um, no. They operate and stay in business by loaning previously non-existant funds out to people and collecting interest on the repayment on those previously non-existant funds.
Seeing as how the bank is limited to loaning out I believe 9X what their current holdings or assets, they wouldn't loan out their depositors funds. They'd loan out "new" money, using the deposits as a "reserve" to back the "loans."
Also, fees are a huge portion of how banks make money. That's why they calculate withdrawals (like checks paid out) before adding deposits (like checks and cash coming in) -- it allows them to maximize the number of people whose accounts are overdrawn on a daily basis.
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Also not to forget that they can skirt how much they can lend out by selling all deliqeint accounts to 3rd party collection agencies and just rerack them up taking more peoples cash in the longrun. (I think they can sell off all there loans actually even non deliqeint ones and rack up more loans)
Im glad im more stable now but when living financially was hard for me I racked in alot in bank fees. I've never borrowed money via a loan but Ive seen the bank purposely stack my charges that where 3 days apart so that four 2 dollar transactions cost me 108 dollars. I demanded records of every single one of my transactions and I paid the bank over 2,000 dollars in fees. If only a small percent of the populus had to overdraw and suffer ill stacked transactions like me then the bank is getting RICH just off that.