Just in time for the festive holiday season, I would like to share two stories about America's giant corporate banks, a couple of real-life incidents that didn't exactly warm the cockles of my heart when I heard about them. They did raise a few hackles, though—and the difference between activating hackles and cockles may be worth considering.
So I offer these two accounts not to paint all bankers as the Scrooge McDucks that emerge in the forthcoming narration, but simply as a caution about the resentment against some of the biggest names in banking that may be building. In each of the stories, we discovered smaller, locally-owned banks that conduct themselves differently—and that is my moral.
It's a part of the deregulation model that Adam Smith didn't address in his analysis of "The Market." That is, capitalists, at least occasionally, should moderate their greed in order to be good neighbors. So here are two examples of how a couple of national banking operations in this city are systematically building bad reputations for themselves.
A friend of mine is trying to work his way out of a deep financial hole. He will in time do so, I am confident, because he has been successful in the past and because he has a talent that will be in great demand in the future. At the present, however, he is scrambling just to survive. I paid him for some work he'd done for me and he asked if I could go with him to the bank to cash the check.
That's how I learned about the policy in place at more than a few local financial institutions of charging a $5 fee for cashing a check drawn on an account at that bank! The fee is charged to anyone who doesn't have an account there. And what do we call people who don't have bank accounts? Well, among other things, we call them poor.
I suppose the wizard that dreamt this one up figured it would push people into opening accounts. But my friend can't open an account because he doesn't have any money after covering the cost of daily expenses. So if I pay him the $60 I owe him for a few hours work with a check, he will wind up paying an 8.33 percent surcharge ($5) to the bank. That's a rip-off. Sure, it's legal in our current no-holds-barred business climate, but it's still a rip-off.
Worse, it's a rip-off of precisely that segment of our population that can least afford it. Is the bank taking a risk? All they do is look on the computer to see if the paper is good—10 seconds of a low-wage teller's time, tops.
When my friend is back on his financial feet, he will not do business with that bank. He'll search for one with a more humane policy. So Multi-state Megalith got his five dollars, but they've lost many times that in future business. Not a wise policy.
But Christmas story number two is even worse. Another friend had her ATM card stolen by her ex-boyfriend. He asked to borrow her baby carseat while he took their child to see the grandparents, so she let him go out to her car to transfer it to his. The next day, long after he'd returned the car seat and the child, she realized he had taken the ATM card which she'd left in the console of the car. By then he'd cleaned her out.
She called the cops, filed a report and notified the bank. The cops were sympathetic, but told her that without proof there was nothing they could do. Merry Christmas.
The bank was even worse. It turns out that while she had only $200 in her account, the generous ATM system had given him well over $400 from it, so the banking official notified her that she owed them $200 and they were also charging her an insufficient funds fee of $26 on each of his withdrawals over the first $200.
It gets worse. She next discovered she couldn't even fight the bank's confiscation of her money because she had a government check due to be deposited electronically in her account in a couple of days and the bank wouldn't let her touch it until they'd extracted their pounds of flesh.
Her mother is a ferocious fighter and she entered the fray on behalf of her daughter. I thought if anyone could extract an ounce of justice, it would be her. But even the formidable mother, police report in hand, flailing the small agate print in the ATM card policy provisions under the nose of the bank's branch manager, failed. She couldn't talk reason to the company, whose policy unfortunately tied the hands of all the people who work for it.
So she closed her four accounts there. So did her daughter, the original victim. And her relatives (there are many) in this town, closed their accounts in Belen and in Phoenix. And she is telling everyone she knows her tale in hopes that they will never do business with that outfit again.
I'm not sure she'll bring the bank to its knees. But she's found another bank that she can trust and at least now her Christmas season will be a little less emotionally turbulent.