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If Potter gets a hold of this building and loan, there will never be another decent house built in this town.
December 31, 2009 2:41 AM   Subscribe

Frank Capra meets Collateralized Debt Obligations:
The idea is simple: If enough people who have money in one of the big four banks move it into smaller, more local, more traditional community banks, then collectively we, the people, will have taken a big step toward re-rigging the financial system so it becomes again the productive, stable engine for growth it's meant to be. It's neither Left nor Right -- it's populism at its best.
Move your money.
posted by Anything (70 comments total) 20 users marked this as a favorite

Another solution would be for President Obama to use the leverage accrued from bailing out large banks and forcing them at pain of dissolution to loan the money they were bailed out with. Still, good luck with this.
posted by Blazecock Pileon at 2:45 AM on December 31, 2009 [3 favorites]


yeah, well as we've seen, that's not gonna happen. And i think it's the government's cold feet on this issue which prompted this grass roots campaign.
posted by jadayne at 2:59 AM on December 31, 2009


We've already done this, moving our savings to a small community bank with only 3 branches. Lots of these banks are part of an ATM consortium called SUM, and so you don't really lose out on the main benefit of the big banks. If we can find a SUM ATM (they're everywhere) then there's no fee for using it.

We had our savings at two big behemoth banks. That's all over. Now we're with a bank that's actually solvent, and where the tellers greet us by name when we go inside.
posted by 1adam12 at 3:11 AM on December 31, 2009 [1 favorite]


Twice now I've put my money in a nice community bank, only to have it swallowed later by a behemoth. The first time was the best, the new bank closed a bunch of branches, shortened hours, put fees on all the accounts, and started charging fees to use a human teller. I went in to close my account, and the new organization didn't send you to a teller for that, you went to a "customer service specialist" standing at what looked like a podium. No desk, just standing there in the middle of the room. Her: "How can I help you?" Me: "I'd like to close my account." Her: "I don't blame you, I would too."

The "new" bank itself got swallowed about a year later.
posted by Ella Fynoe at 3:20 AM on December 31, 2009 [7 favorites]


I bailed out of Chase earlier this year, took what I've got to Frost bank, a Texas bank, been in Texas since it started, remarkable services, and if I have any troubles I can just drive down to San Antone and I'm at corporate headquarters; there's accountability, like, real live people.

It was a great move for me.
posted by dancestoblue at 3:27 AM on December 31, 2009


> Another solution would be for President Obama to use the leverage accrued from bailing out large banks and forcing them at pain of dissolution to loan the money they were bailed out with.

O yeah. Because forcing banks to lend is totally unrelated to these current woes.
posted by chavenet at 3:33 AM on December 31, 2009 [1 favorite]


While I wholly support this idea - if the government won't shrink the banks that are too big to fail, then we ought to - it doesn't include credit unions in their search.
posted by milkrate at 3:55 AM on December 31, 2009 [5 favorites]


Where exactly do you think the small banks invest their excess capital?
posted by fistynuts at 4:04 AM on December 31, 2009 [5 favorites]


Well, I applaud the spirit but I don't see this as having much practical effect for a couple of reasons.

First, just look at one of the the factors banks use to attract business; interest rates. Bigger banks can afford to pay higher rates as their business is much, much larger in scope. Geographical diversification also helps; the small town banks business rises and falls with that small town. As business decline so does the banks prospects and the rates it can afford to pay. A nationwide conglomerate will pretty much always have strong business in one or more of the areas that its active in.

Second, the stickiness of core deposits is a well known phenomenon in banking and its easy to understand: frequently folks are lazy when it comes to money. The internet was widely touted as a leveling mechanism when it came to banking. Folks would shop for the highest interest rates and move money with the click of a mouse.

Turns out it didn't really work that way, generally people prefer to keep most, if not all, of their money in one place. And banks can sweeten the deal as well, reducing / eliminating fees or offering higher rates on deposits, but only if the customer has some other type of relationship e.g., mortgage product with us? We've got a special rate for deposits on offer just for folks like you.

Now if you'd like to talk about the underlying reasons why banks aren't lending we can and its a fascinating topic; the complete collapse of the Shadow Banking System, this incredible evaporation of liquidity. How severe is this?

Well, if The Fed could monetise the entire issuance of US Treasuries tomorrow it still wouldn't provide as much liquidity as the Shadow Banking System did, which once upon a time was sized in excess of $10T. All that liquidity is pretty much gone now, and everyone is looking for something to fill the gap. And that something just ain't there.

Even if they could get the ECB to cooperate and monetise debt as well, two of the worlds largest Central Banks busily purchasing all outstanding government paper across most of the G10, they simply don't have the firepower. And, of course, the ECB simply would never do such a thing, they never opened up as much as The Fed did, being very worried about the consequences should things do wrong. And here is the part where I usually get my Dutch wife all agitated by mentioning that the Germans did indeed win the war, 'cause like it or not the ECB and Euro is essentially the Bundesbank and the Deutsche Mark rebranded; there is a reason why the ECB is located in Frankfurt (and I like personally like the Euro and am actively seeking out Eurozone exposure).

No mistake about it - this absence of liquidity is an absolutely massive deflationary force that any lending officer at a bank will be aware of.

In case anyone's interested I pretty much routinely dl The Feds' Flow of Funds data; released quarterly, it is an incredibly comprehensive resource and very useful if you'd like to track this stuff on your own (as opposed to reading about it here or some guys 'blog / news story).

The current release in its entierty, dated December 10th, 2009 is here, and reading through it really helps one develop independent analysis skills.

I've uploaded a particular summary - Debt Growth by Sector - to Google Docs here.

Its a particularly interesting part of the Flow of Funds report as this component helps one understand what's really going on in the economy, and at a fairly low level. I tell my students at University reading this is key to developing independent thought, and understanding precisely what's going on.

Decembers release is a very fascinating for many reasons; let's take it by sector: I've also got some aggregate data covering funds retail banks are making available for lending; proprietary, it doesn't tell us anything different from what we already know - banks are still restricting funds available for borrowing .

Corroborating this, The Fed has some revised data here, broken down by month and by credit type i.e., revolving or non revolving; this report provides a much more granular view of the consumer position of October 2009. Straight from their summary
Consumer credit decreased at an annual rate of 3-1/4 percent in the third quarter of 2009. Revolving credit decreased at an annual rate of 7-1/4 percent, and nonrevolving credit decreased at an annual rate of 1 percent. In October, consumer credit decreased at an annual rate of 1-3/4 percent.
So the credit contraction is not only pronounced but, considering the circumstances, probably not going to reverse (significantly) in the near to intermediate term.


A few other things we should be aware of: Conclusion: things probably won't be getting much better much faster.

Now as neat as the evaportation of the shadow banking system is (and I can't overstate how historical this event is), you know what I think will be really interesting in the near term is the equity market outlook for 2010; we're seeing the last of the pessimists drop out, everyones a bull now. And with that VIX dropping like a rock, and the chance of US rate hikes increasing gets me all nervous about Q1 2010.

As my first boss on a US Government Bond trading desk said, "when everyone is thinking the same no one is thinking".



Curious: can you please explain the CDO reference in your title? I used to structure those products and the CDO tag was what mostly attracted me to read the article, and I don't think the article has anything to do with credit derivatives.
posted by Mutant at 4:08 AM on December 31, 2009 [82 favorites]


Man, these threads are always fun until someone shows up who knows what they are talking about and ruins it for everyone. ;)
posted by goodnewsfortheinsane at 4:38 AM on December 31, 2009 [11 favorites]


The entire edifice of your post.
Is garbage.

Life is green fields and adventure.
Not monetary acumen in a economic fantasy.

Boaz
posted by Joachim at 4:39 AM on December 31, 2009


Show me an economy.. you can not.. it is a concept.
Show me stocks and bonds. Bits of paper with ink that say 'we own'
But who owns has not the will to take it.

Economies and 'wall steet' thinking. Brokers and talents..
All are trash in
the REAL WORLD

The real world is pain and position . Niche and not niche
Mother nature has no stocks and bonds,, she deals in reality.
posted by Joachim at 4:49 AM on December 31, 2009


Mutant: Curious: can you please explain the CDO reference in your title? I used to structure those products and the CDO tag was what mostly attracted me to read the article, and I don't think the article has anything to do with credit derivatives.

They were mentioned by a congressman on the video on the Move your money frontpage. In my This-American-Life-Planet-Money-Podcast level understanding, misrated CDOs were behind a large portion of the present financial crisis, so I took the liberty of treating CDOs as symbolic to this crisis as opposed to the Great Depression where such instruments did not exist and were thus unknown to Capra.

By apologies if the brush is too broad.
posted by Anything at 4:52 AM on December 31, 2009


By = My
posted by Anything at 4:53 AM on December 31, 2009


Anything -- They were mentioned by a congressman on the video on the Move your money frontpage. In my This-American-Life-Planet-Money-Podcast level understanding, misrated CDOs were behind a large portion of the present financial crisis, so I took the liberty of treating CDOs as symbolic to this crisis as opposed to the Great Depression where such instruments did not exist and were thus unknown to Capra.

By apologies if the brush is too broad.

Ah, thanks - I hear it now. Sorta whizzed by me at first pass. Thats what I get for trying to comment while watching Bloomberg TV ...

And I didn't mean to impugn your otherwise excellent FPP. Many thanks for taking the time to post as I might not have seen it otherwise!
posted by Mutant at 5:03 AM on December 31, 2009


What constitutes a community bank? We have branches in my area of banks that are owned by significantly larger banks. Then we have community banks, that, not doing badly, are beginning to buy up failed banks elsewhere and expand. Example: my bank was limited to my state and had some 75 branches. Now they have expanded to buying up some out of state banks. Is my bank still a community bank?

Some community banks in my area went down the tubes. Some did not. In sum: some local banks are to be trusted...others not.
posted by Postroad at 5:19 AM on December 31, 2009 [1 favorite]


In sum: some local banks are to be trusted...others not.

NO BANKERS SHOULD BE TRUSTED!! YARRRR!!! *pitchfork*

*mattress salesman*

*sells*
posted by cavalier at 5:23 AM on December 31, 2009


First, just look at one of the the factors banks use to attract business; interest rates. Bigger banks can afford to pay higher rates as their business is much, much larger in scope. Geographical diversification also helps; the small town banks business rises and falls with that small town. As business decline so does the banks prospects and the rates it can afford to pay. A nationwide conglomerate will pretty much always have strong business in one or more of the areas that its active in.

I wonder how much money these guys actually make from 'big fish' with huge CDs. Think about how much money these guys have been collecting from overdraft fees, which implies that their most profitable clients are broke a lot of the time. If they moved their accounts it would do a lot of damage, but they're also more likely to want to avoid the hassle, I think.

Either way, I agree that this probably won't work. The fact is, people are lazy about these things. I think there's probably a worry that something bad will happen to the money somehow, people are just not going to be that comfortable moving around there life savings.
posted by delmoi at 5:28 AM on December 31, 2009


Oh and of course given the number of bank failures this past year, a lot of these community banks went belly up. No one lost their money (under $250k) but people might be worried about that, and probably don't want to or know how to look up the banks credit rating.

And another thing is online access. My banks online stuff is kind of crappy, so I imagine other banks might be worse.
posted by delmoi at 5:36 AM on December 31, 2009


It's ironic that Frank Capra should be referenced here: according to his autobiography, he was finally persuaded to "get in on the action" in 1929 and lost heavily on his investments in Goldman Sachs.
posted by RichardS at 5:41 AM on December 31, 2009


I think this is a great idea, but, well, it was proposed by the Huffington Post, which I trust about as far as I can throw an ox.

Anybody have a reliable source for this sort of information?
posted by Hactar at 5:44 AM on December 31, 2009 [2 favorites]


If everybody would just stop killing each other we'd have world peace!

(But yeah, my money is in a small credit union associated with my alma mater.)
posted by msittig at 6:13 AM on December 31, 2009


The fact is, people are lazy about these things. I think there's probably a worry that something bad will happen to the money somehow, people are just not going to be that comfortable moving around there life savings.

Golly gosh... such fear to be had by the small minded. Peons of the system .like you.. Men and women turned into systemic variables... and you want it...
posted by Joachim at 6:21 AM on December 31, 2009


Because forcing banks to lend is totally unrelated to these current woes.

Oh, please. Fannie Mae's problems have nothing - repeat, NOTHING - to do with "being forced to lend." They made a specific decision to go heavy into mortgage derivatives and play around with earnings reports, a decision that went far beyond whatever government mandate they had. *That* is what got them in trouble.
posted by mediareport at 6:27 AM on December 31, 2009 [5 favorites]


Joachim the Obscure.
posted by fourcheesemac at 6:30 AM on December 31, 2009 [5 favorites]


First, just look at one of the the factors banks use to attract business; interest rates. Bigger banks can afford to pay higher rates as their business is much, much larger in scope.

I can only offer anecdata to counter this, but for the past several years I have found that my local credit unions have offered rates that are more favorable to me in practically every aspect of personal finance, compared to big banks (BofA, WaMu, Wells Fargo). Savings accounts, CDs, credit card interest rates, mortgage interest rates.

Granted, I am pretty small potates in the wide wide world of money--but I am incredibly careful with money, very good with math, and a researcher by training and trade. I have had a few interactions with major banks in the last 20 years and each time it was completely obvious that they were out to screw the customer coming and going. No thanks.
posted by Sublimity at 6:35 AM on December 31, 2009 [3 favorites]


chavenet, way to perpetuate the "poor people and minorities are to blame for the crash" meme. I didn't think people could say that with a straight face this side of Limbaugh anymore.
posted by edheil at 6:45 AM on December 31, 2009 [3 favorites]


Credit unions are nice and all, but I've been with two now that were a complete PITA to use online; one that assigned the same account number to my savings and checking account, which made deciphering my statements more than a little frustrating.

On the other hand, when I called to get clarifications, they were uniformly helpful. So good if you like talking to people and figuring out quirky and arcane systems, I suppose.
posted by emjaybee at 7:12 AM on December 31, 2009


didn't we go through this crisis with the savings and loans? i'm all for smaller banks.
posted by My Social Relevance at 7:13 AM on December 31, 2009


I'm already tired of him.
posted by box at 7:33 AM on December 31, 2009


I applaud the effort, but I'm going to go into grumpy mode (a la the local "Sound Off" column of my newspaper that describes various road intersections that need traffic lights, etc) and ask that future social movements include a text version rather than just a video.
posted by RobotVoodooPower at 7:50 AM on December 31, 2009 [1 favorite]


Ah, I'm sorry to be so grumpy .. but I did find the all-caps textual version. Crisis averted.
posted by RobotVoodooPower at 7:54 AM on December 31, 2009


I will be the umpteenth person to suggest credit unions, here's a tool to find one near you.
posted by Mick at 7:55 AM on December 31, 2009 [1 favorite]


Their failure to include credit unions is unfortunate. In many cases, a local credit union may be much more competitive with national banks than local community banks, in terms of interest rates. Also CUs are unlikely (I think it ought to be impossible, but maybe there are ways) to be acquired by megabanks than a local FSB.

I'm not crapping on the true remaining local/community banks, but there's no reason not to show CUs some love.

The suggestion about finding a local that's in an ATM "network" (like SUM) is a good one, since free ATMs seems to be a major sticking point for a lot of people. Another thing to keep in mind is that if you use a debit card for a purchase at a grocery store, you can get cashback; this acts like a fee-free ATM. Although my bank reimburses ATM fees, I do the cashback trick pretty regularly (mostly because I don't want anyone, including my bank, compensating the rapacious ATM owners) and it's perfectly fine for the small amount of cash business I need to keep on hand.
posted by Kadin2048 at 8:04 AM on December 31, 2009


My money has been in a credit union for years now. I gave up on B of A back in 2004. However, the main regional bank here has shaky capitalization and recently had a TARP injection. I know people who have taken their money out because of that (even though it's FDIC insured).
posted by krinklyfig at 8:09 AM on December 31, 2009


People--the only reasons to move your money from a big 4 bank are if you don't like their customer service, or their ATM fees, or savings interest rate, or if you think they're going to go bankrupt.

It is really disingenuous for HuffPo to suggest that redistributing the consumer deposit base of large retail banks is going to prevent future bailouts of investment banks (Bear Stearns, Lehman, Merrill) and similar entities (AIG) that were in never in the business of running ATMs and consumer lending to begin with.

I think my head is going to asplode if I read another article that conflates the two.
posted by chalbe at 8:14 AM on December 31, 2009


I don't want my money in one place. That scares me to death. Between us, we have a joint account in one big box bank and individual accounts in a local credit union and a local bank headquartered in our city. I may yet open another account with my employer's credit union.
posted by lysdexic at 8:17 AM on December 31, 2009


(Yes, I know JPM / BofA / Citi / Wells Fargo are conglomerates with both a retail and investment bank, but the problems, profits, and need for reform lie mostly with the investment bank side.)
posted by chalbe at 8:19 AM on December 31, 2009


The suggested banks in my area are:
Microsoft OLE DB Provider for ODBC Drivers error '80040e31'

[Microsoft][ODBC SQL Server Driver]Timeout expired

/MoveYourMoney/IRACommunityZip.asp, line 275
I guess I'm keeping my money in Megaglobalbanccorp, for now.
posted by Flunkie at 8:27 AM on December 31, 2009 [1 favorite]


My first credit union was comprised of a woman who did the books and could write you a check over her lunch hour, and a board of people I saw every day that met once a month to consider loans. I understand that model would not work in the niche credit unions have carved out for themselves today, but it seems to me that almost all CUs today are just like the banks except with a tax break from the government. Is there a way to get back to true "community" local financial institutions, where everybody knows one another and the scale is very small (like a neighborhood) using the credit union laws?
posted by ackptui at 8:33 AM on December 31, 2009


another article that conflates the two.

They were conflated by the repeal of Glass-Seagall.
posted by Jimmy Havok at 8:38 AM on December 31, 2009 [2 favorites]


Credit Unions FTW.
posted by davejay at 8:41 AM on December 31, 2009


I put all my money in a Christmas account. I get no interest but at the end of the year I get my money back! Is that smart or what?
posted by Postroad at 8:46 AM on December 31, 2009


They were conflated by the repeal of Glass-Seagall.

Well, Bear Stearns, Lehman, Merrill, and AIG didn't have depository arms, so their failures couldn't have been changed or prevented by America moving its bank accounts around. Now, your point might be relevant for BofA/Citi/Wells/JPM, but decreasing those firms' depository bases would probably not have made those firms' investment banking arms any smaller in size or leverage. They're two completely different businesses, with two completely different sources of funding.
posted by chalbe at 8:52 AM on December 31, 2009


> chavenet, way to perpetuate the "poor people and minorities are to blame for the crash" meme.

Not my point and not the point of the article linked. The GSEs' role in the crash is that they took their mandate and ran away with it. They took their implicit government guarantee and a desire to expand the US housing market far and wide and they went overboard. Waaay overboard. It might not have been forced lending, but it was certainly heartily encouraged lending. A very pointed example of the "law" of unintended consequences.
posted by chavenet at 8:59 AM on December 31, 2009


"I put all my money in a Christmas account. I get no interest but at the end of the year I get my money back! Is that smart or what?"

I hope you at least get a toaster.
posted by mr_crash_davis mark II: Jazz Odyssey at 9:11 AM on December 31, 2009


ackptui -- "Is there a way to get back to true "community" local financial institutions, where everybody knows one another and the scale is very small (like a neighborhood) using the credit union laws?"

This is an excellent question and something I think about a lot. I can't really offer a solution, but a little history might help drive discussion around your point forward; some of the earliest commercial banks in England were what's known as Joint Stock Banks.

I must apologise for the sparseness of citation; combination of New Years Eve and gotta hop, but also this is a relatively arcane part of the history of banking, and this reference is all I can find online. If anyone is interested in delving deeper into this topic Heriott Watt University publishes a very excellent history of UK banking which I'm drawing this material from (citing).

Until the Bank Charter Act of 1844 all banks in the UK were private banks, sole proprietorships in fact. Very few people were "banked", maybe less than 2% or so depending upon whose history you look at. Only the Royalty, some of their hangers on and merchants were banked, in fact. Middle class just didn't exist then, and nobody had identified the lower classes as a market to be serviced or exploited, depending upon your view of banking.

The 1844 act allowed for the establishment of banks owned by more than one but no more than SIX shareholders. Almost always, like the private banks they were based upon, shareholders were partners in the firm and played an active role in the running of the enterprise.

This limit was raised incrementally over the year, The Act 1857 allowed for no more than TEN shareholders. These clearly were modest sized enterprises, as their equity - loan capital - was limited to what collectively all shareholders contributed. Of course over time reserves would be created from retained earnings, but the operative phrase here is over time; these were banks run the old fashioned way, to make money and not to take undue risk.

And the reason for this conservatism is easy to understand: how reckless are you going to get, or let your partners get, since its your own damn money at risk? Agency, it would seem, has done us a disservice in many ways.

Needless to say, default rates in those days were very, very low. Of course default did indeed happen, but we're talking several orders of magnitude lower than the best run UK banks today (whoops! pre credit crunch I mean) whose data I have indeed seen.

These Joint Stock Banks were very, very well run firms by anyone's measure. Profitable, yet they provided a needed public service.

Your excellent comment reminded me about this time in banking history. If someone could find a way to scale up the enterprise it would be a fantastic way for a modern bank to be run; the shareholders work at the place, take an active interest in the loan book and more than likely personally know not only each and every depositer but also borrower.

I realise this is, in theory if not in practice, how Credit Unions are supposed to be (hopefully are?) run, smaller scale, smaller loan book, much, much lower (one would hope) default rates.
posted by Mutant at 9:13 AM on December 31, 2009 [6 favorites]


Please forgive me for bragging on my credit union, but I want to respond in part to emjaybee's unfortunate experience. I'm with LGE Community Credit Union, based in Atlanta -- membership open to all Georgia Tech graduates and a bunch of other groups (and it looks very, very easy to add a group to a credit union's eligibility).

Not only do they have great interest rates, but the online system works great too. I think their core constituency has a lot of engineers (Lockheed-Martin, etc.).

If you want free ATM's, catch this: with their high-interest-rate checking account, not only can I use credit union ATMs for free, but I get other banks' ATM fees reimbursed every month.

They're based in Atlanta, I'm in North Carolina, but I would not part with them (we have a local small bank account with First Citizens, too, for the occasional need). I financed a car through them recently and they were extremely helpful (no go on out-of-Georgia mortgages, though).
posted by amtho at 9:28 AM on December 31, 2009


Talk of servicing the lower class made me consider just what that might entail, if an institution were to truly wish to accomodate their commercial needs instead of just hovering over their still-breathing carcasses like a vulture. So many people get into trouble (and are thus banned by banks) because they are young and inexperienced, and don't know they inherent damage they can do to themselves by bouncing a few checks. The Catholic church has a program whereby people wishing to be married in the chuch are required to school themselves in the obligations of marriage as seen by the church. Since public education sees almost no obligation to teach the principles of financial life, I wonder if it is time for financial institutions to take a similar tack, and require an understanding from anyone wanting to open an account or borrow money. You can make good money from ignorance, but once a pariah and bled dry, these folks are no longer customers. Wouldn't it be nice if life were just a little bit less predatory?
posted by ackptui at 9:39 AM on December 31, 2009


On the other hand, when I called to get clarifications, they were uniformly helpful. So good if you like talking to people and figuring out quirky and arcane systems, I suppose.

In contrast, I've never had any issues with my credit union's online banking. I use it the vast majority of the time to do most functions I need.
posted by krinklyfig at 9:56 AM on December 31, 2009


Tangent, but if a bank really wants to focus on the working poor, and wants to help them instead of preying upon them, then it needs to do only three things:

1. Don't hold deposits for ridiculously long periods of time, just because of the account holder's demographics.

When I was young and single with a shitty credit score and a minimum wage job, I regularly had deposits held for up to a week. Just to punish me for not being awesome enough, as far as I can tell. Although I had a bank account, I frequently used those rapacious "check cashing" services, because I needed the money that day, not a week from then.

2. Don't pay out bounced checks. That does no one any favors. The account holder knows if they have the money or not, and paying out a bad check only encourages future bounces.

3. But don't charge a fee, either. Just refuse to honor the check, end of story. Don't refuse to honor the check AND whack a $35 fee onto the account as well.

I don't understand why some non-profit hasn't set this up already. Instead, the working poor are getting more and more check cashing options. I recently saw an ad for Walmart - "let us cash your payroll check and put it on a Walmart card!" UGH.
posted by ErikaB at 10:20 AM on December 31, 2009 [1 favorite]


I did this switch this year. It felt good, and the tellers and bankers are WAY nicer. In the end there is not much difference from my point of view, but it was nice to say FU Chase.
posted by Stonestock Relentless at 10:21 AM on December 31, 2009


My credit union checking account gives me 4% interest and free ATMs everywhere. I can't think of a good reason for using a major bank. There are hundreds of similar organizations, many of them available nationwide. If you don't like logging in to multiple banking websites, use Mint.
posted by East Manitoba Regional Junior Kabaddi Champion '94 at 10:22 AM on December 31, 2009


My SO's CU site is not only a monument to poorly implemented UIs, they change it every few months. But not completely. The result being a mashup of several implementations that not only dramatically change look 'n' feel from screen to screen, but sometimes getting from one core function to another involves a Goldbergian path between 'modules'.

But, yeah, the customer service is pretty excellent and they don't play gotcha at all.

My regional bank, OTOH, has one of the best eBanking sites I've ever encountered. They're bigger than I'd like but they conduct themselves in a weerrrry conservative manner, which I appreciate a great deal. Their customer service is also pretty spot on. I wouldn't want to run afoul of their rules because the fees look intimidating, but the rules of the game are spelled out pretty clearly and they give you a number of breaks before they lower the boom--i.e. the overdraft protection is sizable and free if you cover the shortfall within the billing cycle. They've waived late fee payments on my credit card on several occasions because I've called them up when I knew it would happen and got clearance preemptively.

I've never been sure of the appeal of national banks and have never patronized one.
posted by Fezboy! at 10:26 AM on December 31, 2009


We've got the national account because relatives all over the country also have accounts there, and we can move money back and forth as needed without a lot of hassle.

We've got the local accounts because the money stays here and gets reinvested in the local community.

I spread the love because you don't know who's going to get bought up or closed down.
posted by lysdexic at 10:45 AM on December 31, 2009


"I put all my money in a Christmas account. I get no interest but at the end of the year I get my money back! Is that smart or what?"

I hope you at least get a toaster.

I recently bought a new toaster oven. And, as a complimentary gift, I was given a bank.
posted by box at 10:49 AM on December 31, 2009 [2 favorites]


Blazecock -

On the surface, a good idea to force the banks to lend. Several problems:

1) Consumers and businesses are de-leveraging at the moment. In other words, they've reached a wiley-coyote moment where suddenly everyone has realized "oh shit, you mean it's gonna take me 10,000 years to pay back all the debt I've taken out over the years", and are now starting to save more and pay down debt;

2) Banks legitimately don't see too many good investments apart from parking cash in treasuries, risk free;

3) Banks know they're going to need the capital in their vaults to shore up finances when the next wave of defaults hits after the new year. You think banks are cleaned up? Ha! We've fixed NOTHING over the past twelve months.

Obama and Bush's biggest failure is that neither had the balls to wind down these "too big to fail" institutions as they should have been. The losses have not been forced into the open, instead we've papered over losses and failed to fix the underlying system.

Banks can fail - the system needs to be saved. We've instead allowed the banks to be saved and the system continues to teeter.
posted by tgrundke at 12:03 PM on December 31, 2009


I've been following this for a while and think it's a great idea. I think this is also the moment of a secular change toward local commerce, food and living in general. When I refinanced my mortgage earlier this year I specifically went with a very strong, conservative and well run bank here in Cleveland.

I've also eliminated the use of credit cards for all but online purchases and pay those balanced monthly. Ideally I'd like to pitch the entirely, but that's not realistic if you ever want to rent a car or hotel room.

Starve the beast is a great mantra when it comes to our financial behemoths. Too bad our government refuses to do the same...
posted by tgrundke at 12:06 PM on December 31, 2009


While my credit union is not the greatest (besides the aforementioned online banking issues, it seems to have delusions of grandeur if you go by the size of the new "headquarters"), it is miles better than my local bank which is run by timber barons and their ilk.*

*and yes, I know how 1880s that sounds, but there ya go.
posted by madajb at 12:07 PM on December 31, 2009


Mutant -

Great posts, as always. Thanks.
posted by tgrundke at 12:08 PM on December 31, 2009


Ooh! ooh! the part about free ATMs made me remember another thing I love about banking at Credit Unions: the CU Service Network, which provides shared branching across the USA.

You can walk into any participating CU (which is most of them--look for the "CU Swirl" logo) and transact business at the CU that you belong to. My family just moved across the continental US---most of our money is still held and our finances are still transacted out of our old CU on the west coast. We joined a CU out here on the east coast and whatever business we can't do online, we can do at the local branch.

In my experience this also holds true for ATMs, that using a CU ATM is fee-free for any CU members.

Also, I believe all 7-11s have ATMs that are surcharge-free for CU members. Am having trouble finding a legitimate cite online at the moment, but at least until recently that's been my experience in person...
posted by Sublimity at 12:43 PM on December 31, 2009


2) Banks legitimately don't see too many good investments apart from parking cash in treasuries, risk free;

Uh ... borrowing at 0% and lending at ~5% or more is a pretty good spread, which they've been doing for a while now. However, the banks are also de-leveraging, because the requirements are more stringent for leverage in order to avoid TARP. A bank may be helped by TARP, but they usually take a hit in their stock price as well as their deposits, so there is some significant short-term pain in taking TARP money, and they try to avoid that if at all possible.
posted by krinklyfig at 1:04 PM on December 31, 2009


I still have my checking account at a Gigantobank, but I moved my credit card (I only maintain one plus my Amex) to USAA earlier this year for essentially these reasons. I'd had the card that preceded it with Citibank for 22 years, since I got it as a cheapie in college. They kept raising the rate here and there, which was not a huge issue since I never maintain a balance, and misfiring on the emails about the due date, which was really annoying.

The final straw was when Citi decided they were jacking up the interest rate through the roof (29.99%!) in December to beat the new credit card regulations that are coming in next year. I had a giant line of credit, to the point that I could have bought a car on my credit car, and I'd never paid late by more than a couple of days in the years I'd had the card, and that only rarely. When I called to close the card, the rep I talked to tried to lay on how sad the bank was that they were losing my business after 22 years as if I were abandoning an old friend. She didn't transfer me to a retention specialist, though, which tells me I wasn't a desirable customer and they weren't that sorry to lose me (which makes sense since I don't run a balance and don't generate much in the way of interest and fees).

USAA has been fantastic as an insurance company and we've had nothing but good experiences with them. Their online payment site is solid, too. We have a bank account there set up for us to eventually move our money there at some point down the road. And they're even sort of local to us (Fredericksburg TX, and we're in Austin). It's not the local credit union, but I did feel like I was moving to suck my money out of The Impersonal Financial System and into something smaller and more community-oriented, for all that I have some concerns about the (military) community it serves.
posted by immlass at 1:15 PM on December 31, 2009


Whatever the merits of the idea, I was disappointed with my search results: Among my 7 or 8 hits (including duplicates) were Wachovia, whatever that thing in Wal-Mart is, and a couple of others belonging to corporations with bankier sounding names. That left one only one option with a couple of branches.

Maybe it's just Charlotte.
posted by phrits at 4:07 PM on December 31, 2009


ackptui: "Is there a way to get back to true "community" local financial institutions, where everybody knows one another and the scale is very small (like a neighborhood) using the credit union laws?"

In theory, RoSCAs pretty much sound like what you want. However, I think theres an insiduous aspect to neighborhood lending models: if you only know people of a certain ethnicity, it's very hard to trust or lend to anyone outside that. Formal Savings and Loans or Credit Unions are much better for transparency and legitimacy. In my limited observation, people without bank accounts are tax dodging or otherwise engaging in illegal commerce.
posted by pwnguin at 6:36 PM on December 31, 2009


chavenet:

Not my point and not the point of the article linked.

Curious, then, that you described that article as being about "forcing banks to lend," when it was really just blamestorming against Barney Frank.
posted by Jimmy Havok at 7:41 PM on December 31, 2009 [1 favorite]


Although Mutant makes excellent points (as usual), there's the point that the reason the DSB Bank collapsed in the Netherlands was the call for people to get their money out the thursday before the collapse by Pieter Lakeman.

You could argue the bank would have collapsed anyway, but the former owner of the DSB Bank said that the bank would have been solvent if it weren't for the people taking the money out, so all this could at least service as a big warning for the banks...
posted by DreamerFi at 2:30 AM on January 1, 2010


Jimmy Havok:

Curious, then, that you described that article as being about "forcing banks to lend," when it was really just blamestorming against Barney Frank.

Not curious at all. The article explains policy errors that accelerated the problem via the GSEs. My reply is to the stuffed straw man that I was the perpetuating the "poor people and minorities are to blame for the crash" meme. I wasn't. The blame is with the perpetrators, not the victims. Policymakers are accomplices in this mess, and I don't think policymakers should "force banks to lend". If the government wants to bail out banks, then it should bail out banks. But if the government thinks it can make better lending decisions, then why not eliminate the middle man?
posted by chavenet at 5:05 AM on January 1, 2010


My bank, run by the Wal-Mart barons, is actually really good, although it's been expanding like mad as it buys up other nearby regional banks that fail. (with FDIC risk-sharing, they aren't stupid)

Their overdraft fees are the lowest anywhere, they credit deposits up to 7PM and all deposits are credited before any debits from the account during processing, and they almost never hold deposits. (For me, it's over about $5000 that they hold, and even then they give me the first $5000 that day and only hold the rest for five, presuming I don't complain, which will usually net me a shorter hold)

Moreover, if they do hold an item without notifying me when I make the deposit, they credit back any overdraft fees and any third party fees you incur because they held the item, presuming it doesn't come back unpaid.

They're very, very, friendly for a commercial bank, they didn't take TARP money, and they hold over 99% of their mortgages on their own book.

They're pretty much on par or better than the local credit unions, although they don't credit back ATM fees.
posted by wierdo at 11:16 AM on January 1, 2010


Well, emjaybee, I have a suggestion for you. You wrote, "Credit unions are nice and all, but I've been with two now that were a complete PITA to use online..."

Given that the FBI & the American Bankers Association just issued a recommendation urging any business doing online banking to use a whole separate PC (see http://news.google.com/news/story?cf=all&ned=us&hl=en&ncl=doaAIbeEJ4pSq0MJb1zmLBcOO7eFM), then maybe you can join refuseniks like me and not do your banking online at all! (We use phone banking and the ATM.) *shrug* Between 2001 and the end of 2009 I did not once have my online account hacked because the damn thing doesn't exist. Of course, I also won't use a debit card, and I pay my bills in full each month -- so maybe this advice isn't applicable to you. :7)

So instead stop into a credit union and talk to a representative or VP or whatever. Tell them you'd like to switch but you're afraid their platform is inferior to what you use with the big guys. Perhaps they can calm your fears with a demo.
posted by wenestvedt at 11:40 AM on January 6, 2010


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