What does the banking industry have to do to catch a break with the public?

The industry became Public Enemy #1 when the federal government stepped in and spent hundreds of billions of taxpayer dollars to prop up ailing institutions. Then, the industry landed on “America’s Most Wanted” when they tried to conduct business as usual, which was deemed by the public to be too excessive. Say good-bye to company retreats and incentives. Now, institutions are on the hot seat for raising fees and interest rates as they attempt to remove themselves from the government payroll and return to profitability.

I get that the industry is under increased public scrutiny. It should have been that way from the beginning. But the federal government has got to step in at some point and take one for the banking industry.

A recession of this depth and breadth makes everyone a riskier borrower. In these times, it’s only natural for banks to hike interest rates, unless taxpayers want the federal government to continue subsidizing banks forever. It might be counter-intuitive to charge more when consumers have less money, but it’s a necessary step.

The federal government has to step in and say that as long as banks are operating within the parameters of current laws and regulation, they are free to charge whatever they deem necessary. It must be noted that they are not free to do whatever they so choose.

Everyone — and I mean everyone — wants banks to lend more money as a means of pulling the economy out of recession. But they don’t want banks to price for the increased risk of lending money in a recession.

Not adequately pricing for risk — isn’t that how we got into this situation in the first place?