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Monday, September 24, 2012

I HATE BANKS, pt II

Give me a shovel and man, I'll plant 'em -Mojo Nixon, "I Hate Banks"
I don't really hate banks, but I do find them odd and dated. There are banks, or at least financial institutions that do make me very annoyed and frustrated, as I wrote about a few weeks back. Their legal games and cronyism with government and flat out breaking the rules without consequence does annoy me, but that's restricted to the very biggest, most powerful mega corporations such as Citi and Goldman-Sachs. 
I like small, more local banks.  My personal bank is called West Coast Bank.  I was in Washington Mutual until they cut their own throats with absolutely idiotic home loans and loan trading.  They were one of the medium sized institutions that were killed off so big mega financial houses could stay alive - or in this case, were gobbled up by Chase, who got bigger and richer from its financial stupidity rather than paying a price for bad business practices.
As soon as Chase took over, it started charging for checking.  WAMU's big draw for me was free checking.  My financial situation is such that I go for fairly long periods of time between any pay and that means if a bank charges a fee every month, it just eats up my checking account into nothing.  So I changed banks to a smaller one favored by farmers.
West Coast is a nice place, the people are friendly, they seem to like working there, and they have nice policies.  But recently they, too, started to charge for their checking.  As I understand it the Frank-Dodd financial reform bill basically made it impossible - illegal, even - for banks to have free checking.  Why?  Well this is just a guess but free checking was making banks like WAMU very popular and those upstarts had to be stopped by mega banks like BankAmerica.
But that means someone like me is better off just not having a bank at all.  Inflation is already chewing away my money like tiny rats without a bank just taking it for the privilege of storing my money in a safe place.
However, using cash only means I cannot buy anything online.  It also means I can't be paid online, because I need some kind of account to work with.  So I'm in a bit of a quandary, but I have some ideas, like buying a card I can load up when I need it, and using PayPal's banking system (you can just use them to store money and transfer it).  Another possibility is a local credit union, because they seem to have slightly different rules than usual banks.
But consider banks a moment.  How many times do you really need to go into a bank these days?  How many times do you need to talk to someone face to face?  A lot of people do their deposits through an ATM, or have their pay directly deposited.  Some people get paid online for their services, and don't ever get a paycheck.  So they don't ever need to go into a bank except on rare occasions.
I don't really need a checkbook.  I just don't write very many checks at all, but I do use a lot of deposit slips.  I'd rather have 100 deposit slips and 10 checks in a book than the other way around.  These day I think I'm more representative than not of the general public.
And because interest rates are so low, there's just no reason to put money into a savings account.  If you go find the best return for savings accounts, you're looking at less than 1% interest.  If you put 100 bucks into your account, you get .95 cents added a month at the highest return in the nation.  There is just no reason at all to use a savings account.  In fact, putting your money into a savings account is basically having it drain away.  But less accessible accounts like CDs are even less useful, because they give you barely 2% interest and you cannot get that money out except every 3 months at the earliest. 
Its not the fault of the banks, entirely.  They can't give very high interest rates right now, because they can't loan at very high rates, so they aren't making the margin of income to offer more for savings.  But banks are more awkward and less useful these days so its difficult to justify even having an account.
And when you consider the likelihood that we're looking at an economic disaster in the near future, I'm not sure locking your money up where you can't get at it fast and reliably is such a good idea anyway.

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