NEW YORK ( TheStreet) -- The Federal Deposit Insurance Corp. says banks are growing healthier, reporting higher net income and lower debt as the year draws to a close. But the banking sector, at least in terms of individual banks, is shrinking, and fast.
The number of banks is plummeting in an environment where:
Savings rates are lower than ever. According to the BankingMyWay.com Weekly Savings Account Rate tracker, the average interest rate on a bank savings account is a paltry 0.067%.
Mortgages are more expensive. This makes home purchases more expensive. The tracker reports that 30-year fixed mortgage rates rose to 4.42% from 4.31% last week amid a stronger economy.
Bank customers are paying more in fees and charges. The average bank charges customers 30 fees, with some banks slapping customers with up to 50 different account fees. Meanwhile, a single overdraft fee of $30 or so can wipe out an entire year's worth of interest earned on the average bank savings account.
So where, exactly, do fewer banks fit into the consumer picture?
First, the figures, as reported by The Wall Street Journal: The number of U.S. banks has fallen to 6,891 in the third quarter of this year, the lowest since the federal government started monitoring the number of banks back in 1934.
The peak number of banks -- 18,000 -- was in the early 1980s, but there was a sharp decline after that, especially among smaller banks with assets of $100 million or less.