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Bank Transfer: Successful
This past Saturday was “Bank Transfer Day,” a day of action in which thousands of people moved their money from “too big to fail” banking titans into credit unions and smaller regional banks. While it’s hard to tell precisely how many people followed through on their threats to close accounts on Saturday itself, over the past month credit unions have added 650,000 new members (as opposed to 80,000 in a regular month), resulting in more than $4.5 billion in new deposits.
As Sarah Jaffe at Alternet noted, ABC News aired a remarkable report calling the exodus of customers a “bank revolt” and stating, “as of today, 1 million consumers are hurling a lightning-bolt warning at the big banks, moving their money out in protest.”
Now, a lot of the impact of closing accounts might have been symbolic, and $4.5 billion might not be all that much money relative to the size of the banking system as a whole. But, as Salon’s Andrew Leonard writes, riffing on an old joke, “$4.5 billion here, $4.5 billion there, and pretty soon you are talking about real money, even for JPMorgan-Chase.”
All in all, Bank Transfer Day was a pretty powerful expression of collective disgust by Americans fed up with the goliath banks. Right?
Well, not everyone agrees. Leave it to the New Republic to publish a piece of smug nay-saying in which the writer shows himself to be far smarter than all those who had the nerve to take collective action.
In this case, Simon van Zuylen-Wood, a reporter-researcher for the magazine, penned an article entitled, “How Bank Transfer Day Will Help the Banks It’s Trying to Hurt.” He argued:
[I]f the executives at the country’s biggest banks have circled Bank Transfer Day on their calendars, it’s probably not out of anxiety. Whatever the intentions of its organizers, Bank Transfer Day may end helping the very one percenters they mean to punish.
At the root of the problem is that many Bank Transfer Day enthusiasts have overestimated their value to the banks they patronize: Ultimately, not all bank customers are made equal....According to Jennifer Tescher, President and CEO of the consultancy Center for Financial Services Information, banks typically earn at about 80 percent of their deposit revenue from the top 20 percent of their customers.
In his post, van Zuylen-Wood goes on to explain that maintaining small checking accounts can actually cost big banks more money than the accounts generate in profits. And, owing to the passage of the Dodd-Frank bill last year, banks are limited in the amount they can charge in overdraft or “swipe fees” that they previously used to make small customers worthwhile for them. He continues:
Bank of America’s early October proposal to supplement its lost “swipe fee” revenue using a five dollar per month charge to holders of debit cards should probably be understood in that context. It was designed to be a win-win proposition for the bank: either it earned $60 per year from each debit card customer with a checking count under $20,000...or it would drive unprofitable customers away from the bank entirely (or at least toward Bank of America credit cards, which have become more profitable than debit cards), to the benefit of the bank’s bottom line.
If the article were meant merely as an analysis of the business of handling small checking accounts, I would say that it makes some perfectly fair points. But it’s framed as something more than that—as a piece that analyzes the efficacy of a political action and that argues that those taking the action are naive. In that capacity, it is model of crap contrarianism. If I had a dollar for every self-satisfied commentary written (even by ostensibly sympathetic liberals) about protests being misguided and ineffective, I’d no doubt be able to join the wealthy elite that the #Occupy movement has been targeting. And I expect that I would earn about 80 percent of my deposit revenue from the New Republic.
The fact of the matter is that, if the big banks wanted to expel customers, they could easily do so. (Why not a $20 monthly fee for debit card use?) But far from receiving an eager farewell at bank branches eager to shed small-time depositors, many of those who have descended upon institutions such as Citibank demanding to close their accounts report encountering bank managers who tried to convince them to change their minds.
Of course, the “move your money” effort is not only a matter of individuals’ decisions about their personal finances. In the context of larger Occupy Wall Street mobilizations, many people were coupling the closing of accounts with demands for political change. That’s why others who have swarmed in as part of group actions have encountered police threatening (or even conducting) arrests.
Overall, Bank Transfer Day was part of a wave of public outrage, defiance, and protest that is doing significant damage to the banks’ reputations—which they evidently value. As van Zuylen-Wood himself notes:
Ultimately, the Bank of America and its competitors chose not to go ahead with the five dollar charge, deciding that the hit to their PR wasn’t worth the potential gains to their bottom line. As Diane Casey-Landry, a former CEO of the American Bankers Association told me, the public outcry against BoA was enough of a “reputational kick in the chin” that its top competitors—Wells Fargo, Citibank, and Chase—abandoned their proposed debit fees as well.
What is a day of action in which thousands close their accounts and denounce the banks as greedy bastards if not another PR “kick in the chin”?
In his article, van Zuylen-Wood uses selective citation of a source to suggest that credit unions might not want the influx of new members:
Worse yet, by transferring their money to credit unions, Bank Transfer Day participants may also be harming the very financial institutions they mean to help. These not-for-profit banking co-ops are governed by their depositors and are generally more customer-friendly than banks—although too big a customer base could threaten that. Indeed, a little more than a week ago, in anticipation of Bank Transfer Day, the National Credit Union Administration sent out a memo advising its federal regulators that a large influx of new customers could lead to long-term problems down the road, reminding them that credit unions are penalized if their retained earnings fall short of seven percent of their total assets. In other words, by inundating credit unions with a flood of capital they likely cannot profitably invest, the Bank Transfer Day participants may be pushing those institutions to abandon the perks that make them attractive, like free checking accounts.
Bank Transfer Day gets one basic thing right: Checking account holders have a right to take their business wherever they wish. What they forget, however, is that not everyone will want the business they have to offer.
Except that, the credit unions do want the new business—and they’ve been very vocal about that fact. The same source that van Zuylen-Wood cites, the National Credit Union Association, sent out a press release last week lauding Bank Transfer Day and celebrating the influx of new members. It includes exuberant quotes from the organization’s president, Bill Cheney:
“Many credit unions across the nation...are making special efforts to tap the surging interest in credit unions,” said Cheney.“They are conducting advertising campaigns both individually and cooperatively with others, sending ‘switch kits’ to existing members to share with family members or other prospective members, beefing up websites, extending hours and staffing for Bank Transfer Day, performing e-mail blasts to members, maximizing social media campaigns, putting up banners in lobbies or on their buildings, offering bonuses to members who bring in new members, and giving bonuses to members as well,” Cheney said.
The New York Daily News quoted another credit union executive basically saying the exact opposite of what van Zuylen-Wood wants to convey:
“These are very good times for credit unions,” said Kirk Kordeleski, CEO of Bethpage Federal Credit Union, one of Long Island’s largest with 24 branches and $4.4 billion in assets. “All this conversation about fees has led to a lot of opportunity for us,” said Kordeleski, who saw a 60% hike in new members in October, to 1550 from 925.
In general, “vote with your dollars” consumer actions are not my preferred model of organizing. Moreover, I have no illusions that the amount of money transferred by small account-holders, in itself, is going to cripple the banking giants. But my answer to people who raise that point is the same as my response to people who think that moving your money to a credit union is merely a lifestyle decision with no real political impact. The energy of something like Bank Transfer Day only feeds into other activist efforts and broadens the constituency supporting regulation of the financial sector. This weekend, activists got thousands of people to move their money. Next week they can find a new way to stick it to the big banks.
- Posted in
46 Comments so far
Show AllLocal is always better than national. You have more control when things are done locally. Fuck the big banks.
A tidy little launch in encouragement to local/transition town type dynamics. Gestation of transition includes rethinking and observing emerging dynamics. Investment in struggling local co-op development and the breadth of community considerations that serve to replace the 'disaster capitalism' mentality are among the things I look forward to. Like an early pregnancy, good diet, good attentive exercise, good friends, and good belly laughs contribute to a healthy birth.
I guess I was ahead of the curve on this one. I started moving my money early this year. I have a bunch of CDs that as the reach maturity Im moving them to a local credit union that serves low income areas and is considered a Community Development Financial Institution. I'll have all my retirement savings moved there by the end of the year.
It feels good to know my money will help local people that need it rather than it going to bonuses for banksters that already have more money than they know what to do with.
Anyone reminded of the old phrase "sour grapes"?
"Driven by hunger, a fox tried to reach some grapes hanging high on the vine but was unable to, although he leaped with all his strength. As he went away, the fox remarked, 'Oh, you aren't even ripe yet! I don't need any sour grapes.' People who speak disparagingly of things that they cannot attain would do well to apply this story to themselves." Aesop Fable
Our piddly little accounts lie low on the vine, but the bellies of the bankers have grown so large they can't bend over low enough to reach them. They're not willing to pay a living wage to anyone to pick them for them, So they'd like to stomp them, but their feet are so small in proportion to their bodies they'd topple over if they did so.
Haven't bothered with the New Republic for literally decades-- ever since it became a propaganda platform for the Israeli apartheid colony. Of course, that is true of many U.S. publications but the NR had an interesting intellectual pedigree to betray.
I joined a credit union in 1995 and kept my checking/savings there even when I moved out of state... so did not have the pleasure of leaving a big bank during the recent festivities.
In his post, van Zuylen-Wood goes on to explain that "maintaining small checking accounts can actually cost big banks more money than the accounts generate in profits." This is just so much BS I can hardly stand it. Friggin' liar! They wouldn't even make the accounts available unless it made them money, think about it.
Small accounts cost money... Hm.... Hm... Then wouldn't the banks all stop marketing them? I hear tell they are good at maximizing profits...
And just consider the usurious rates of interest the bank gets by loaning your money to others.
"According to Jennifer Tescher, President and CEO of the consultancy Center for Financial Services Information, banks typically earn at about 80 percent of their deposit revenue from the top 20 percent of their customers."
Their biggest accounts are often the cash deposits from brokerage accounts and IRA's. It's important for those with brokerage accounts to realize that they can control where they deposit their FDIC insured portion of their cash. You can contact your broker to get the list of banks they use, and you can request certain banks be excluded from the list for your cash. That will move your cash out of those banks without forcing you to change brokers.
Update: Some IRA's do not have the feature above. In those, you can purchase CD's from other banking institutions of your choice, and still get the cash moved out of the primary cash bank.
'In general, “vote with your dollars” consumer actions are not my preferred model of organizing.'
How's that again? Big Corporations need our money to survive - no money, no Corporation. Remember Minolta? Bennigans? Filene's Basement?
Voting with our dollars is THE most effective (and the easiest) form of 'protest' there is in a dog-eat-dog Capitalist system - if we all spent concientiously, Evil Corporation would eventually become an unworkable business model.
Amen! This careless statement by Engler neutralizes the whole article.
What is the preferred model, going into the voting booth under the illusion of choice to vote for what is in effect a two-headed, one party system controlled by banksters and special interest groups?
Your only vote that counts in our corporate capitalist system is the one that goes with every dollar you have: a dollar spent is a vote "yes", a dollar withheld is a vote "no". I vote "no" a lot, starve the corporate beast!
Both of you well said and glad you mention this. Engler leaves himself a backdoor exit in this article so he can keep his job. It's understandable but is it admirable?
shop local and shop fair trade. Buy organic while it still means grown with integrity. We don't have to go without anything in order to vote yes to supporting diversity and integrity and no to plutocracy.
Here! Here! Yes. We support the biggest and most damaging corporations with our consumer dollars when we shop at their big box stores, buy their "made in China" products, and so on. I am hoping that more consumer action is planned and carried out. And, big side-benefit, we can't be arrested for shopping at a local supplier instead of going to the big box. It's win/win---we win twice with each dollar spent. And for those who say they can't afford to pay the price of goods at local storres, I think we are beginning to see the actual cost of those 50-cent sweatshirts. Some people say they have no choice but to shop at the big box because it's the only store in town. I encourage people who think that to look around, in their town and on the web. We still have options.
With the scam of fractional reserve, every dollar removed from the banksters' clutches costs them at least 9:1. Don't be fooled. This is costing the banks plenty. @lorenzolarue is correct in stating "[the banks] wouldn't even make the accounts available unless it made them money". The banksters are not in the business of charity.
With fractional reserve banking the amount may be $4.5 B x 9 = $40.5 Billion. Thats better. But with no regulations and regulations not being enforced where they exist the amount is more likely (using the imaginery 'leverage') $4.5 x 40 = $180 Billion.
I think it is effective. People are realizing that we can't always be local but we need to be heading that way. This is a start. Good Job.
[Please Note: pay attention the republicans in Congress are looking to loot the Credit Unions and are trying to relax the credit union reserve requirements; the democrats are quite accomodating to republican requests - be wary]
If their earnings are fictional, then so are their losses.
Simon van Zuylen-Wood is guilty of slopaganda. Let the rich eat their own slopaganda. Slopaganda is all that comes out of a corrupt rotten system.
Ummm.... I moved to a Credit Union because it made me feel like I 'owned' my own money. I do not get that feeling from corporate banks.
**SOMETHING TO KNOW ABOUT CREDIT UNIONS**
Those of you thinking of moving your money to a Credit Union need to first research the place you are moving it to; because there are two kinds of credit unions. There are CU's that give back to the community and there are CU's owned by corporations. Make sure that you do not put your money into a CU owned by a corporation. Usually, you have to work for these corporations in order to put your money in them; so if you do, LOOK OUT. As stated, they are non-profit but that's because they are suppose to use their profits and invest it back into the community. Like the article says:
"credit unions are penalized if their retained earnings fall short of seven percent of their total assets. In other words, by inundating credit unions with a flood of capital they likely cannot profitably invest, the Bank Transfer Day participants may be pushing those institutions to abandon the perks that make them attractive, like free checking accounts."
If the CU you are with is owned by a corporation you work for, they are going to use those profits and invest them back into that company. Your money will not be going back to the community at large.
What we REALLY need to do is come together as neighbors, friends, family and co-workers and create our OWN Credit Unions. Then, we can ensure that not only are our earning safe, but they are being invested back into OUR community; as opposed to risky assets you can't have for 30 years and a pension you can only pray isn't taken from you.
What the piece omitted in talking about the Simon Zuylen-Wood article is a desperation argument boycotted parties often use, "We didn't need you anyway." It should be noted that such arguments are usually the last before they admit one's actions hurt them. That this was produced by an establishment liberal mouthpiece like The New Republic (which has been a sham since the Stephen Glass scandal and their embrace of the Iraq fiasco, among a myriad of things) is not surprising either. Occupy Wall Street and Bank Transfer Day are populist manifestations of real people's anger towards the financial mandarins of America, and their media eunuchs / shills (and The New Republic is one of their shops) are still flailing away ineffectually.
Here's another topic that isn't addressed by the 'move your money' people. What about those of us that CUs won't take? My personal experience. I went through a divorce where my ex-wife wrote a bunch of bad checks on a defunct account. Even after explaining this to the bank, they basically told me that it would either be paid or I could go fuck myself. I won't pay it so...enter the local CU. I've admired CUs for years and was looking to get my money away from Wells Fargo so I applied. They told me that because BofA has a record of some bad checks from me, that they won't take me as a member. That has been the case from every CU I've applied to. Meanwhile, horrible ol' WF let me open an 'Opportunity' checking account, with restrictions and after a year of good standing, I now have a full fledged bank account, with no abnormal restrictions and full privileges.
So, while I understand the CUs desire to have the best members possible, there are many people who've experienced bad situations, sometimes not of their own doing, that they turn away. The big banks are shit but, if they help more people than the CUs will, they'll continue to be utilized, regardless of how shitty they otherwise are.
There was a time in U.S. America that a dissatisfied customer would chose to no longer buy a companies goods or services. Companies understood this, and individual accounts were important to them. Now not so much. Like George Carlin says " They don't care about you, they don't care about you, they don't give a fuck about you!" If you start losing business just Rebrand the public is to dumb to figure it out.
iwonder you got that right. Back in 1962 I complained to Gerber baby foods that the redesigned spout on their cereal box was inconvenient and they sent me a box full of baby foods with an apologetic letter.
Hi BeForKids, Their systems are set up to dis-empower us, and they want us to believe we are powerless. But we have the power of the purse. Hit them where it hurts. STOP buying their products and they go away! And stop giving money to these lying politicians whatever the party.
NateW got it right and Simon van Zuylen-Wood is just another toady for the 1%.
Black_Anarch, I understand your position, but like small businesses, CUs are more vulnerable than big banks. They certainly don't have the FED and the Treasury running around cleaning up after them - with OUR tax dollars! I saw a cute sign in a store: "Due to frequent disappointments we no longer accept checks". All the little guys are in the same boat, being swamped by the !% mega yachts. Personally, I would forgive them and reapply.
What's interesting is all the spinning flying around. Tells me the 1% is worried. I think they're going to get more worried. And then they will get dangerous. No way they will give up what they've stolen without a fight.
I'm concerned about that too. I don't know what they will do to hurt credit unions--the community based ones and not their own, of course-- but I'm pretty sure they are thinking about that right now. We're going to need OWS togetherness more than ever the more effective we become!!!
It isn't just small depositors who are moving their money. These small organized depositors are not going to stop with their deposits. Next stop for the small organized depositors is their churches, community organizations, public schools, and municipal and state governments. If congress will not take action, Main Street will take matters into their own hands. The money on deposit with the TBTF is the peoples' money and the people are bringing it home. There is more than one way to bring these TBTFers down to size. Take control of your MONEY.
excellent idea. Yes. This would be a very good next step to organize---groups to go out and speak to churches, community organizations, public schools, small local businesses, and so on. This is how we are going to make a difference---by changing our consumer support right along with making our voices heard and our numbers seen.
Christmas 2011 -- Birth of a New Tradition
As the holidays approach, the giant Asian factories are kicking into high
gear to provide Americans with monstrous piles of cheaply produced goods --
merchandise that has been produced at the expense of American labor. This
year will be different. This year Americans will give the gift of genuine
concern for other Americans. There is no longer an excuse that, at gift
giving time, nothing can be found that is produced by American hands. Yes
there is!
It's time to think outside the box, people. Who says a gift needs to fit in
a shirt box, wrapped in Chinese produced wrapping paper?
Everyone -- yes EVERYONE gets their hair cut. How about gift certificates
from your local American hair salon or barber?
Gym membership? It's appropriate for all ages who are thinking about some
health improvement.
Who wouldn't appreciate getting their car detailed? Small, American owned
detail shops and car washes would love to sell you a gift certificate or a
book of gift certificates.
Are you one of those extravagant givers who think nothing of plonking down
the Benjamines on a Chinese made flat-screen? Perhaps that grateful gift
receiver would like his driveway sealed, or lawn mowed for the summer, or
driveway plowed all winter, or games at the local golf course.
There are a bazillion owner-run restaurants -- all offering gift
certificates. And, if your intended isn't the fancy eatery sort, what about
a half dozen breakfasts at the local breakfast joint. Remember, folks this
isn't about big National chains -- this is about supporting your home town
Americans with their financial lives on the line to keep their doors open.
How many people couldn't use an oil change for their car, truck or
motorcycle, done at a shop run by the American working guy?
Thinking about a heartfelt gift for mom? Mom would LOVE the services of a
local cleaning lady for a day.
My computer could use a tune-up, and I KNOW I can find some young guy who is
struggling to get his repair business up and running.
OK, you were looking for something more personal. Local crafts people spin
their own wool and knit them into scarves. They make jewelry, and pottery
and beautiful wooden boxes.
Plan your holiday outings at local, owner operated restaurants and leave
your server a nice tip. And, how about going out to see a play or ballet at
your hometown theatre.
Musicians need love too, so find a venue showcasing local bands.
Honestly, people, do you REALLY need to buy another ten thousand Chinese
lights for the house? When you buy a five dollar string of light, about
fifty cents stays in the community. If you have those kinds of bucks to
burn, leave the mailman, trash guy or babysitter a nice BIG tip.
You see, Christmas is no longer about draining American pockets so that
China can build another glittering city. Christmas is now about caring about
US, encouraging American small businesses to keep plugging away to follow
their dreams. And, when we care about other Americans, we care about our
communities, and the benefits come back to us in ways we couldn't imagine.
THIS is the new American Christmas tradition.
Forward this to everyone on your mailing list -- post it to discussion
groups -- throw up a post on Craigslist in the Rants and Raves section in
your city -- send it to the editor of your local paper and radio stations,
and TV news departments. This is a revolution of caring about each other,
and isn't that what Christmas is about?
Thank you for saying all this, for taking the time. I want to add that in my town I can get everything I need without ever going into a big box store. We have a local hardware store owned by a local resident who has been running that store for fifty years. He carries most things that I need around the house and he can answer any question, even about things he doesn't carry. He's a community treasure. We have a lumber store too and between them I never need to go to the big box for any hardware purchses. Our local grocery store (a chain for sure but a regional chain that the big box super stores is trying to eliminate) carries paper products, kitchen gadgets and such. I don't need to go to the big box for anything in fact. I haven't stepped into one for over a decade. I don't think anybody really needs to.
Each individual has to decide who to support with their money. I will not do business with Walmart, Koch Industries, and quite a few other companies. I will not buy Chinese goods unless there is no choice. Looking online for American goods has allowed me to find some very high quality goods that are a better value and pick up some used stuff on Ebay that will last a lifetime. It has also allowed me to turn off the buy it now mentality and save a ton of money on things I could get by without by doing things another way.
I have purchased from some good local merchants who still try to sell quality. I have also advised many retailers that I want quality goods made by people who make a living wage. I see a few more proud MADE IN USA tags and advertisements.
good for you. I applaud you. I have been travelling the same line of consumer choices for some years and it feels good at every turn. I hope more Americans will begin to change their spending and shopping habits. We as a public have been hynotised, mesmerized, propagandized into believing that it costs less to go to a cheap goods store where the prices promise to be lower. I think we are seeing more clearly now that buying those cheap goods supports a system that is costing us BIG! Now, we have to get our country back, our choices back by selecting purchases that support our 99% and support quality instead of supporting cheap and flimsy and supporting the make it cheap in china 1%.
I am with you. I have never stepped foot into a wal mart and I won't go into a Target as they promote cheap labor, right wing politicians and corporate personhood. I have also taught this to my children who are teens now. These kids are savvy to the game going down.
Where I live it is easy to support small local businesses and banks and there is a wonderful experience of community.
Another powerful People Powered move: TURN OFF and tune out everything and anything that has to do with FOx " news" or those avenues that echo their propaganda.
Fox is a corporate Re- public- Con machine meant to confuse and distract from Real issues & Truth. Fox fuels false facts, hatred & knee jerk emotions to divide and conquer the American people. This distracts the people while corps. buy & control more and more of the people's government and drain the very public funds that educate and support all our peoples
health and well being.
The vision I hold is one where advertisers are abandoning Fox news due to it being boycotted effectively. Of course, the REAL BONUS is you get to feel really good cause you no longer allow their negative energy into your personal & sacred universe. Makes more room for compassion , love and proactive action among our fellow American citizens.
van Zuylen-Wood? Where does he come from? There are now too many in the media to believe they have happened by accident. My guess is they are indicative of a structure, a programme.
Reading Time magazine a week ago and its anodyne analysis mixed with lashings of sweetener was obviously carefully contrived. It is a propagandist magazine. It is childish, conceited and embarrassing. Xinhua is vital hard news in comparison.
Is it a matter of marketing or is it a matter of the cultural balance in the USA?
For me it is both with a seasoning of purposeful mind control from a source probably within the Pentagon.
Time would only be tolerable if it was the exception. The media in the USA indicates there are deep cultural problems in the USA.
A revolution is inevitable and the likelihood of it being messy is very high.
In truth it has long begun. The reactionaries have been ahead of the curve for some time and are presently exporting the mess in the form of warfare in foreign lands.
...You know, while we're at it,
it's not that hard to drive by an ExxonMobil to the next station either...
Thanks for refreshing my dedication to the disgust i have, for the last 40 years of argueing against the established gov't, or should i say entrenched ,self-serving folks who are supposed to be representing "the people" Some time ago, i commented that there is only one way to stop this insane gov't is to 'TAKE AWAY THE MONEY, AND GROW A GARDEN'. Sooner or later big business and our dear representatives will have to pay taxes. Main stream media wonks of all stripes, will get raped for taxes from the very people that hired them. OOOOh, thats all coming down on them now! All the things we can do not to buy or spend money for, is another nail in their coffin. We are having a rough time now, worked all our life. Just hang in there, it's their turn to suffer. I'm lol right now, you can't get blood from a stone.We will survive....Q
Yes qwikslver, the solutions are there, is the will? I knew it was coming down when in the nineties they told me I didn't understand the new economy. Bullshit says I, what's the old economy, eating, working, being productive? No you can have your cake and eat it too. We are all going to pay a heavy price for buying into this crock. Withdraw and protect yourselves. The play is on, we can't stop it, and will have to ride it out to it's conclusion. A circle of friends, relatives, and neighbors can get through the coming hard times together. Big business and Big government, are nothing but self serving liars, don't believe a word they say. Build up your local economy.
About twenty years ago, I realized that bank robbery had a new meaning: The banks were robbing the people.
I switched my account from one of the lower level "bank robbers", PNC, to a local bank. I've saved a lot of money since then. Then I transfered my credit card debt from Wells Fargo to Citibank (I had both accounts and Wells Fargo was the worst). I then payed off Citibank and got my credit card through my local bank.
I pay next to nothing to banks anymore. All of my bills are paid and I have no outstanding debt. Life is good without debt.
Try it you'll like it.
Amen to that . You are not free if you are in debt. Unfortunately a mortgage enslaves the majority of Americans. IT 's a great racket for the banks & insurance companies.
I have a friend who works high up on wall street and here is how they get rich on the peoples money. One avenue: You pay into life insurance ( such as AIG) , the insurance companies "sell" their collective bundles of money to investors on wall street such as goldMan sacks (sic) or Morgan Stanley,etc. ( to make money on your money) and Wall street designs money bundles which they then sell to the banks in the packaged form of mortgages The banks add their interest on to that money and offer at a higher cost to us (for our collective money) a lifetime of debt for shelter.
If you want t move your money away from big banks, credit unions are not your only alternative. Every community has its small local banks. Their service and their returns, in my experience, are superior. When I walk into my bank the tellers and the bank manager know me. I'm living overseas temporarily and I can email the manager and she'll take care of business for me. Check it out.
The big elephant in the room of the bank executives is the realization that the big banks don't provide any new and unique services, are often hard to deal with, and are not loved by their customers. As the small bank customers leave and find better solutions with people they can actually talk with, big customers will follow. With the very high degree of automation and more and more online banking, small banks can provide all the services wanted and not worry about the effort to add new staff.
If my company is a billion dollar affair I may need a global bank but how many billion dollar companies are there. Virtually any small business can do all there business with a small bank or credit union and not miss a beat. When that becomes common knowledge, the elephant will have its revenge.
Three cheers for Mark Engler. If the big banks aren't concerned why did they rescind the $60 per year debit card plan? Also, the movement toward credit unions is part of a broader movement toward cooperatives that is needed given the fragile nature of the globally tied casino that produces no real value except to the biggest, smartest winners and harms the rest of us.
Thanks again Mr. Engler
As I understand it, the deposits within a bank are the proof of the puddin' with the Federal Reserve. Exactly how our money is a basis for loaning money to banks at prime is beyond my pea brain, but that is how they figure how much the banks can afford to take. Then the banks loan it out at the going rates to make them wealthy. If my understanding is correct, a few billion less would make a dent in the amount of money some of these operations can get from the fed, and that is good enough for me!
A couple of years in the banking industry did not make me an expert, but this one's fairly simple.
Most banks actually do lose money most of the time on most small accounts, at least if one computes profit and loss in the standard, woefully inaccurate way. They lose very little, but they lose some. However, those accounts allow the banks to make considerable money elsewhere:
Small clients almost cover the costs of branch and staff operations, which allows banks serve more profitable clients at little extra cost
Small clients establish the bank as a pillar of the community (love that phrase!). That is, they show regulators that the bank serves the community and show more profitable clients that this is a large and stable bank and a bank doing straightforward, honest business.
Small clients inadvertently advertise: "What bank should I use?" "Gee, I dunno; I'm with First. They seem OK." This is actually more true for rich clients, who are less likely to use a bank because it is on the corner by the hot dog stand.
Shutting branches down shows people that business is bad and gives the bank less market draw.
Small clients that go to a credit union do support that credit union. That credit union, in turn, competes with banks. Any given bank might like a monopoly, but all banks would also like a monopoly on ways of doing business. That is, they would like clients to assume that they must go to a bank or an S and L for financial services and financial security.
People usually go to banks that they have done business with to order more profit-generating services. The checking account functions as a loss leader for home loans, car loans, credit cards, student loans, and so forth
So if the banker tells you it helps the bank when you leave, that's misrepresentation -- either an outright lie or some form of rationalization.
Small businesses are very important to the growth of the economy. So to help the economy and to create jobs, we should put our money in community banks, rather than credit unions.
"Community banks are the primary source of lending for small businesses and farms. Even though they compose just 21 percent of the banking industry by assets, community banks with less than $10B in assets made 58 percent of outstanding bank loans to small businesses."
Source of quote: Independent Community Banks of America, www.icba.org, Community Banking Facts Page
BTW. I agree with the comments on van ZW's statement that small checking accounts aren't worthwhile for big banks. If that were true, why did Chase just offer me $200 to open a checking account?