In a time, long ago, Americans looked to their banker as a partner to assist them in their financial affairs. Often a small loan at a reasonable fee and a prompt payback resolved a pressing problem. At other times sage advice from a knowledgeable branch manager made the difference between distress and good fortune. And above all, the ability of a depositor to maintain a simple passbook account and receive a meaningful flow of interest income might provide just enough extra to make ends meet.

Circumstances change. During the past four decades banking morphed into a conglomerate industry, unimaginable when in August 1979 Paul Volcker assumed the Chairmanship of the Federal Reserve System. At the time President Jimmy Carter experienced the effects of a world turning hostile to the USA. Our alliance with the prominent mid-eastern nation of Iran disintegrated when, on January 16 of that year, the Shah fled the country, replaced by an Islamic regime. In addition, the OPEC cartel successfully engaged in a series of oil embargos depriving us of the inexpensive petroleum on which our economy thrived. And of particular concern, our nation found itself in the grips of an unacceptable inflation. Something needed to be done.

Chairman Volcker took control and steadily increased the prime rate into the 20% range (it topped out for a short time at 21¼%). Though it proved to be traumatic for many, it broke the inflationary spiral and conditions began to return to normal. And with the inauguration of a business-friendly President Ronald Reagan in January 1981, prosperity appeared to return, though in a less congenial world than before. Over the next twenty years our nation enjoyed – with but a few blips – a vibrant stock market and a real estate inventory systematically increasing in value. By the arrival of January 1, 2000, the American economy seemed poised for perpetual growth.

A funny thing happened on the way to nirvana. Many of those public corporations whose purposes related to technology – and mostly with astronomical Price-Earnings Ratios – ran into a fiscal brick wall. The bursting of the tech bubble – also known as the Dotcom Crash – began March 11, 2000. By its conclusion October 9, 2002, it wiped out countless would-be entrepreneurs. Many illusory fortunes disappeared. But the technology demise qualified merely as the hors d’Oeuvres; the main course was yet to follow. During the 17 month period from October 9, 2007 through March 9, 2009, the Dow Jones Industrial Average fell from its peak of 14,164.53 to a low of 7,924.56 – a loss of approximately 50 percent of its value. This constituted the worst sustained decline since the collapse kicked off by the Stock Market Crash of 1929 and the Great Depression that followed.

From this point on, American enterprise took on a regulatory overtone, with banking policies decreed by the federal government. The impetus for this oversight was the 2319-page Dodd-Frank legislation, enacted in 2010 during the Barack Obama administration, thereby establishing a myriad of regulatory committees promulgating programs to which banks thereafter adhered. Although those rules masqueraded as reform, most were as convoluted as they were arcane. The result of those imposed federal regulatory burdens were predictable: duplicative and often contradictory rules which rarely promote safety or soundness. In particular, mortgage lending became a nightmare due to the regulations and disclosures required. The layers of red tape became so burdensome, more and more potentially profitable firms simply abandoned the banking business. Only the mammoth institutions, with direct links to the federal regulators and the U.S. treasury, truly prospered.

Where are we now in the year 2017? Things have certainly changed in my home state of California. Of the nearly 500 banks headquartered here in 1994, less than 180 remain – and of these, even fewer will be around by year’s end. Quite simply, the smallest ones maintain too few assets to keep up with the ever growing compliance costs. It’s for this reason the community banks, accounting in 1994 for nearly half of the Golden State’s banking, are now down to just 11 in number. Most of America’s banking is now a monopoly, provided by a group you can count on your fingers.

We’ve finally arrived at this article’s title subject: interest. Do you remember when you once received annual interest on your savings account of five percent? If you maintained a balance of $100,000, you’d receive $5,000 in income, which often meant the difference between meeting all your bills or falling a bit short. So how do things shape up if you slip the same sum into a Chase Bank account today? You’ll receive an annual return of 0.01% – $10 is what you’ll see. Okay, let’s find a more competitive bank: Bank of America. Hmm, at the same 0.01% rate, that’s no better – and to make things even worse, they charge a $5 per month account service fee, so you’ll be $50 out of pocket every year.

There’s a justification the interest rates offered are in the basement. It’s because these institutions no longer need to match rates with a lot of competitors trying to get your deposit, for most of them are gone. The few majors retain an increasingly firm lock on the market; you’ll soon bank with them or there’s nowhere else to go. And don’t expect them to compete among themselves for your business. They’re now collectively in the driver’s seat, and will not cut each other’s throats for your money, for there’s plenty to go around for the handful of them remaining. It’s for this reason you may as well reconcile yourself to receiving minuscule interest on your savings. I see no changes in the foreseeable future.

So much for the interest you receive. Now, what about the interest you’re required to pay? Although Fed Chairman Janet Yellen is systematically increasing the prime rate, it’s not going up rapidly. This is not by accident. The one thing keeping the rate reasonably low is the more than $20 trillion in loans the US is on the hook for. It’s for Uncle Sam’s benefit rates remain low – the one thing we may be thankful for. Therefore, for those of you with a good credit rating, you needn’t expect your personal borrowing to become unsustainable, nor will your adjustable mortgage rate soon soar out of control. However, if your credit is below par – possibly in the 550 range or below – you may expect to be put upon at every opportunity. Be late with a payment on your credit card a couple of times and you’ll find yourself paying 25% or more on the unpaid principal balance. Incur the misfortune of needing a payday loan which must be rolled over and you’ll be the victim of rates rising to 300% or greater. Be aware this world is a hostile environment. There are many lenders who are not your friend.

Let me conclude on what I consider to be a humorous note. It’s relates to a newspaper display ad by a bank I’ll not name, offering an 18-month Certificate of Deposit that pays an annual percentage rate (APR) of 1.50 percent. The rate offered is printed in 72 point bold; the details are at the bottom in 8 point upper and lowercase. If you read carefully you’ll learn: the minimum CD amount must be $100,000; any existing deposit money they presently hold cannot be applied to the CD; fees may reduce earnings on the account; a penalty will be imposed for early withdrawal; additional terms and disclosures are available upon request. And under these conditions, you’re entitled to an APR of 1.5 percent. Perhaps you don’t consider this humorous, but I find it hilarious. Only in an investment environment gone mad might such an offering be made.