Bank Stories

I read an article in the Los Angeles Times today titled, BofA’s Sales Tactics Blasted, by Tom Hamburger. The article basically said Bank of America targeted immigrants and the poor with exorbitant fees and high pressure sales tactics as well as prevented the SEIU from unionizing the bank’s workers.

So I thought about some stories I’d heard about banks (in general) and wondered if the article held any credence for me.

Once a friend told me how he bought $30 worth of gas but pulled out his debit card instead of his credit card and used it by accident. His account was subsequently overdrawn. I wondered why the debit card didn’t deny the transaction since it was going to overdraw the account. I mean, credit cards do that when you exceed their limit. He had no idea and to top it off, he was socked with a $35 overdraft fee. I asked him if he called his bank to tell them about the error and see if he could get the fee reversed. He said a few flowery words I’d prefer not to repeat and said they gave him back $20. Since it wasn’t the bank’s mistake they wouldn’t reimburse him the entire amount. After a few more flowery words interspersed with, “I haven’t overdrawn my account in forever,” and “I have money in other accounts,” we changed subjects.

(That conversation still makes me wonder why transactions are not denied when they would overdraw an account. I mean, as a bank I would think logically, if a customer doesn’t have the money and you give it to him, there is a risk he won’t pay it back. Unless of course, the bank thinks the $35 fee they charge their customers more than makes up for the potential of uncollected funds. Does the more stringent bankruptcy laws have an effect here so they know they'll get their money?)

Another friend told me how bizarre it is that people with money in their accounts pay so few service charges. For example, he said, if you have a certain minimum balance, the monthly service charges, fees for check reorders and some other pay-for-services are typically free. When he was in college with little money, he used to have to pay all of the fees (subsequently overdrawing his account), but now that he’s working and can afford the fees, they’re waived.

(Hmmm. People who need a break aren’t getting one.)

A woman once told me she worked at a regional bank in the 80’s. She said while there was an emphasis on opening new accounts and products for clients, when a national bank took them over, she was stunned by the really high sales goals enforced upon the staff. Before the takeover, there was an emphasis on finding out what a customer needed. For example, if someone had a large balance in a no-interest checking account, she would offer them a savings account. She said that changed. Now she was expected to offer clients a product if they didn’t have it and convince them they needed it. If a man has one checking account, offer him another one. If he doesn’t want it, offer him a credit card. And so on, and so on.

(Interesting.)

In conclusion, I know and knew many people who worked at banks: good people, some of which are close friends. As with any job, people have to meet their goals. If they don’t, they’re removed and someone else is ready to take their place. And a bank's goal (so I believe) is all about making money for its shareholders-just like any other shareholder-run business.

A bank’s staff, especially at the branch level, is a sales force, and just like the old cliche, if you walk onto a used car dealer’s lot, expect the hard sell. If you don’t like it, don’t go there.

(Someone I know is jumping up and down with joy seeing me write those final words.)

BUT...I feel there is a blurry line between banks and the national interest. Aside from being guardians of our nation’s deposits, banks provide a vital role to keep the economy humming. Unless of course you live within walking distance of every service that you need and you can pay with the cash you have stuffed under your mattress or barter, you need a bank account - and only a financial institution can provide it. As a result banks' fees have to be fair and reasonable. especially for the financially strapped. Banks can’t be allowed to operate under the same rules as other privately-owned corporations whose focus is on maximizing profit. And to be fair, there are more restrictions on banks and their operations than other corporations because of the vital national role they play. But obviously not enough restrictions are in place as their greed did help proceed to tank our economy and they feel that a $35 fee for an overdrawn account is fair and reasonable.

The executives who probably thought up the $35 fee probably have free accounts and someone at the bank who makes sure that if they make a mistake by pulling out the wrong card, they’re not going to be overdrawn or hit with an unreimbursable fee.

So based on this, I think the overdraft fee - and bank fee structures for retail banking - are directly targeted at the poor who are most likely going to be overdrawn whether from a mistake or hoping the rent check doesn't clear before their next paycheck hits their account or do not have enough in their accounts to reach minimum balance thresholds. As for Bank of America pressuring their sales people to sell, I agree. Every job pressures (motivates) their staff to do better either through rewards or reprimands. Too much pressure? Perhaps for some people, but BofA did state their employee satisfaction surveys were high. On the unions I have no idea.

A final note: That same woman who worked at a bank in the 80’s also said her small bank before the merger used to receive a report of customers who were going to be overdrawn that day. The office staff would then give those customers a "courtesy call" and let them know they had to make a deposit by 10 a.m., otherwise they would be overdrawn and/or any pending checks would be rejected.

Talk about a costly, labor-intensive operation.

Then again, talk about putting your customers first.

I Was So Mad!

During the first fifteen minutes of my son’s kindergarten class, children can pick a book from the classroom’s book nook and have their parents read to them.

Friday, my son picked “I Was So Mad” by Mercer Mayer. My son liked the cover with Little Critter (a strange beaver-like protagonist in Mayer’s series of children’s books) standing beside a bathtub filled with frogs. We’ve read and enjoyed the adventures of Little Critter before, so I thought this one would be fine.

It started off well enough, with Little Critter getting into trouble doing silly things around the house that he thought were okay. Each time he was reprimanded he said he got really mad. After a couple of pages, I thought, okay, this is a book helping children learn that they’re not alone in feeling angry when they’re reprimanded and maybe it'll eventually show them an appropriate way in which to deal with their anger. But after about seven different scenarios of Little Critter getting madder and madder he finally said, “I’m so mad I’m going to run away from home!”

Whoa, I thought and glanced at the three five-year-olds sitting around me. I doubt that any of them had ever thought of running away from home because they had been mad at their family. I looked back at the book and hoped the story would quickly improve.

Little Critter proceeded to put all of his favorite toys in his wagon and pack a box of chocolate chip cookies for the road.

(Worse)

What was Little Critter’s mother doing during all this time? Nothing. She just stood in the kitchen with a smile on her face watching the love of her life prepare to the leave the house. She never tried to stop him or help him understand his feelings.

What finally stops him? His love for his mom? His sudden understanding of his feelings? No. After walking ten feet down the road he sees his friends who invite him to play baseball.

Little Critter agrees, but his final line is, “…but if I get so mad again, I am definitely running away from home.”

And then the book was over.

(And I was so mad.)

What kind of message is that to children? That it’s okay to run away from home when you’re mad? Kids are great imitators and reservoirs of information. I’ve lost count of the number of times my son will say or do something and use the justification of something he read or saw or heard.

With books like this, no wonder some kids are messed up.