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View Diary: Good thing banks don't want customers, because they're losing them (183 comments)

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  •  Low value accounts are more trouble than... (2+ / 0-)
    Recommended by:
    Deep Texan, Kimball Cross

    ...they are worth.

    If you have a fair amount of money, the bank will try to keep you, but the bank will not care about an account that always has $100 in it, even a million such accounts. The costs of servicing these accounts is too high; they don't want to be bothered.

    As far as state governments and other public institutions go, they should keep their money wherever they make the most interest / pay the lowest costs. That only makes sense.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Mon Nov 21, 2011 at 10:51:35 AM PST

    •  Everyone of those accounts (44+ / 0-)

      of $100 ... is a potential loan down the road, or auto loan. It's a person that later in life needs to put their retirement somewhere.

      The person with a $100 account then gets married and has kids and opens a College Fund.  People open up businesses.

      Every person that moves their money or tears up their credit card is a loss of a life long customer.

      Our little meager business and our meager account in the meager Local Credit Union is going on a decade. That is a decade Big Bank Free (yes other than the Visa logo on the card).

      Even if hurts them or not, it makes me happy and our Credit Union bank is trouble free from what was our US Bank accounts.

      I'm surprised at the people I've run into that have moved their money. People I wouldn't have expected and a few wingers too.

      It's a perfect non-partisan fight. But that's just ... a bonus ;-)

    •  A few $35 transfer fees every so often (16+ / 0-)

      can make a low-balance account VERY profitable.

      "The extinction of the human race will come from its inability to EMOTIONALLY comprehend the exponential function." -- Edward Teller

      by lgmcp on Mon Nov 21, 2011 at 11:11:07 AM PST

      [ Parent ]

    •  I can't agree with you. (27+ / 0-)

      Interest and lowests costs are not the only costs municipalities pay. BoA is responsible for fradulent mortgage forclosures, and all of the To Big To Fails were complicit in selling junk morgage bonds to city and state pension funds, bonds that were wrapped in sparkle paper and rated "triple A way conservative very safe" by Moodys.

      The To Big To Fails put cities and counties all over the country in financial turmoil. In my county alone the poverty rate has doubled. Half of the schools in my school district were closed. Parks have been neglected, roads have been neglected. We couldn't get out of our house for two days after a snowstorm last winter because the city couldn't afford to plow the side streets.

      It makes no sense to continue to do business with the same companies that screwed us all.

      "YOPP!" --Horton Hears a Who

      by Reepicheep on Mon Nov 21, 2011 at 11:14:27 AM PST

      [ Parent ]

    •  Short term thinking (14+ / 0-)
      If you have a fair amount of money, the bank will try to keep you, but the bank will not care about an account that always has $100 in it, even a million such accounts. The costs of servicing these accounts is too high; they don't want to be bothered.

      Short term thinking.  The low value bank account of today turns into the high value bank account of tomorrow.   The bad feelings generated by closing accounts today will not be forgotten tomorrow.  

      Of course another argument is the societal benefit of everyone having an account.   Those kicked out of their accounts today will be financial predator bait tomorrow.  But today's government doesn't seem to think in terms of societal good but who contributes the most to their reelection campaigns.

    •  Except as Kos diaried (15+ / 0-)

      The big banks are generating far fewer small business loans per dollar of deposits than the small banks and credit unions.

      If you want small business loans in your city or state, it is worthwhile to keep your money in the smaller institutions. Putting government money in a multinational bank is the classic example of penny-wise and pound foolish.

      Besides, my experience is that either way the big banks lose.

      In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra

      by blue aardvark on Mon Nov 21, 2011 at 11:33:15 AM PST

      [ Parent ]

    •  You'd be surprised what can (15+ / 0-)

      happen with that little $100 account.

      When our daughter was born, our local community bank matched our $5.00 opening amount with their $5.00. We used that account to deposit change and our occasional mileage checks. We didn't have a lot of money at all. In 15 years, we had $26,000 in that account.

      Numbers count: the dollars and the number of depositors.

      You're right in that we need to pressure larger bodies, such as municipalities, to move their money. Keep in mind that takes time because one just doesn't rip major investments apart without planning.

      Individuals can act more quickly. In my case, we had everything in credit unions or a local community bank. It still took me a few months to transition to my credit card to my local community bank and ease off the one from US Bank (changing recurring charges, etc.).

      The point: every bit counts.

      You can always count on Americans to do the right thing - after they've tried everything else. -- Sir Winston Churchill

      by bleeding heart on Mon Nov 21, 2011 at 11:41:25 AM PST

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    •  It's sad to read a post on Dkos buying into the (15+ / 0-)

      thought process of the immediate bottom line being the only thing that should be taken into consideration.  The "most interest/lowest costs" aspect of the issue is probably one of the least important.  The more important issues they should be considering are:  how much of the  money will be reinvested back into their own community?  how will local jobs be affected?  What kind of policies are used by the bank in determining investments?  How safe are the investments (not too safe in the case of many of these big banks, obviously).

      Looking at only that bare bottom line aspect is most of what's gotten this country into the mess it's in.  Encouraging people to look at the big, overall picture is much, much more important in the long run.

      "If you trust you are not critical; if you are critical you do not trust" by our own Dauphin

      by gustynpip on Mon Nov 21, 2011 at 11:52:08 AM PST

      [ Parent ]

    •  actually they love small accounts (6+ / 0-)

      small accounts pay more fees: monthly fees, overpriced check fees, overdraft fees, ATM use fees, credit card pate payment fees...

      they love small accounts.

      "Politics is like driving. To go backward put it in R. To go forward put it in D."

      by TrueBlueMajority on Mon Nov 21, 2011 at 12:03:23 PM PST

      [ Parent ]

    •  State governments... (5+ / 0-)

      ...save money by leaving big banks.

      Big banks outsource their processing operations which makes states pay unemployment insurance.

      Big banks deny loans to homeowners and business which crushes employment and property values.

      Big banks periodically require bailouts which drain taxpayer money.

      If your state government has a choice between getting an extra 30 basis points in interest and killing a Too-Big-To-Fail bank, they should go for the kill every time. It is in their best long-term financial and economic interest to do so.

    •  If that is the case, then why do they act (5+ / 0-)

      so desperate when people come in to close their dinky little $200.00 accounts?  Also, if that is the case then why are they spending so much money on advertising to encourage the average joe with his low value accounts to bank with them?  You don't spend millions on TV advertising unless you want those people to buy/use your product.

      There is no saving throw against stupid.

      by Throw The Bums Out on Mon Nov 21, 2011 at 12:18:58 PM PST

      [ Parent ]

    •  "servicing" the accounts? (3+ / 0-)
      Recommended by:
      Palafox, ozsea1, Kimball Cross

      what the hell? Um, servicing is done by computer. it's a deposit that they get to use for whatever they want. there's no "servicing". Sending a statement via email every month require no money. they charge for using your own damned ATM. So, there's no cost there. Deposits are often automatic. So, again no cost.

      Servicing? Its 2011. There's no "servicing".

      I've become re-radicalized. Thanks a lot you bunch of oligarchical fascist sons-of-bitches. But once again, I have no choice. Bring it the fuck on.

      by mdmslle on Mon Nov 21, 2011 at 12:25:02 PM PST

      [ Parent ]

      •  Actually (2+ / 0-)
        Recommended by:
        Kimball Cross, mdmslle

        there ARE service costs in the form of unseen armies of 'proofers':

        http://www.ehow.com/...

        It is incorrect to assume that everyone transacts business electronically. Our clients still pay us by check, and we still pay certain bills by check.

        "No one earns $100 million. You steal $100 million." --Fran Lebowitz

        by SNFinVA on Mon Nov 21, 2011 at 01:35:19 PM PST

        [ Parent ]

        •  yes and the banks still have to have tellers (0+ / 0-)

          and checks and all that manual stuff regardless of who has an account.

          the tellers don't get paid by the transaction. So it costs BofA no more to cash or deposit my manually deposited check for $50 than it costs them to deposit an manually deposited check for $5,000,000. the teller is in the bank.

          And they still shut down branches and lay off staff. But really, they have to have open branches somewhere and they must be staffed.

          I've become re-radicalized. Thanks a lot you bunch of oligarchical fascist sons-of-bitches. But once again, I have no choice. Bring it the fuck on.

          by mdmslle on Mon Nov 21, 2011 at 02:54:31 PM PST

          [ Parent ]

          •  Tellers do get paid (0+ / 0-)

            by the hour, and small businesses make deposits of many checks and/or quantities cash which can take extra time to process.

            On Monday mornings and especially on Tuesdays after a long weekend, banks have to be staffed well before opening time in order to process the larger than usual quantity of night deposits.

            "No one earns $100 million. You steal $100 million." --Fran Lebowitz

            by SNFinVA on Mon Nov 21, 2011 at 03:09:30 PM PST

            [ Parent ]

            •  yeah, and? so now it's small businesses? (0+ / 0-)

              I thought we were talking about small individual account holders. People with $100 in their account. Now we're talking about small businesses that make cash deposits on Mondays?

              I've become re-radicalized. Thanks a lot you bunch of oligarchical fascist sons-of-bitches. But once again, I have no choice. Bring it the fuck on.

              by mdmslle on Mon Nov 21, 2011 at 04:13:41 PM PST

              [ Parent ]

      •  computers, software and employees cot money (0+ / 0-)
    •  Financial standpoint, yes. Metrics? No. (1+ / 0-)
      Recommended by:
      ozsea1

      Here's the problem for those BigBankCo branch managers: They're judged in the corporation by both the total amount deposited and by the number of accounts.

      Maybe the CEOs don't care quite so much, but the branch and regional managers are watching both of those numbers go down -- and they're panicking.

      "Don't ride in anything with a Capissen 38 engine. They fall right out of the sky." -- Kaywinnit Lee Frye

      by Technowitch on Mon Nov 21, 2011 at 12:55:02 PM PST

      [ Parent ]

      •  The local manager might care (0+ / 0-)

        But the organization clearly doesn't.

        A $10 account fee speaks louder than any amount of bank employees ever could: "we don't want you as our customer!"

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Mon Nov 21, 2011 at 02:58:25 PM PST

        [ Parent ]

        •  If the manager cares, his/her manager cares... (0+ / 0-)

          ...and on up the chain.

          Besides, as others here have pointed out, small accounts and all the fees they generate have been one of the banksters' main cash cows.

          "Don't ride in anything with a Capissen 38 engine. They fall right out of the sky." -- Kaywinnit Lee Frye

          by Technowitch on Mon Nov 21, 2011 at 06:41:12 PM PST

          [ Parent ]

          •  Maybe, maybe not (0+ / 0-)

            Like I said, a $10 charge for something that is free most other places is a powerful message. "Go away", it says.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Mon Nov 21, 2011 at 08:00:28 PM PST

            [ Parent ]

    •  Nope. (0+ / 0-)

      If a bank like BOA loses 42 billion, don't think for a moment that it doesn't hurt.

      It cuts down on the amount they can loan, thus cutting their profits.

      "...You know why their symbol is the letter 'D'? Because it's a grade that means 'good enough, but just barely.' You know why the Republican symbol is 'R'? Because it's the noise a pirate makes when he robs you and feeds you to a shark." Bill Maher

      by wrights on Mon Nov 21, 2011 at 01:11:12 PM PST

      [ Parent ]

      •  I'm confused (0+ / 0-)

        One of the major criticisms of banks around here is that banks aren't lending money (Sparhawk's view: because there are few worthwhile loans to be made in the present economic environment).

        Anyway, why would banks want more deposits to not loan?

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Mon Nov 21, 2011 at 02:54:46 PM PST

        [ Parent ]

    •  Read the replies below (0+ / 0-)

      I must agree with them.

      My personal banker at Wells Fargo, in a candid attempt to keep me from closing my account last week, verified what's been stated in the replies below, thereby agreeing with them.

      "Left Libertarianism" doesn't get much traction here. But you persist, I will give you props for that.

      “If the law supposes that,” said Mr. Bumble, “the law is a ass—a idiot. If that’s the eye of the law, the law is a bachelor; and the worst I wish the law is that his eye may be opened by experience—by experience.” ~ Charles Dickens, from Oliver Twist

      by ozsea1 on Mon Nov 21, 2011 at 01:40:33 PM PST

      [ Parent ]

    •  then why does BoA arrest people who try to (0+ / 0-)

      close their accounts en masse. . . . .

      And if the accounts don't really matter, then why would you or anyone else care if we close them all out.

      This whole "go ahead and leave, we don't care anyway" line is pure and simple bullshit.  (shrug)

      •  Um (0+ / 0-)

        BoA "arrests people" because they are being disruptive and unruly. Go into the bank and close your account without loudly making a political statement about it. Guarantee you won't be arrested.

        Additionally, I don't care at all whether people stay with big banks, go to credit unions, or what. The market will sort all of this out on its own. My only point is that BoA is probably not that interested in keeping you as a customer if they charge account fees.

        /BoA doesn't arrest people, the police do

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Mon Nov 21, 2011 at 02:11:41 PM PST

        [ Parent ]

        •  Ah, well, leave it to the algorithms then... (1+ / 0-)
          Recommended by:
          The Nose
          The market will sort all of this out on its own.

          Last time I looked "the  market" was unable to the the simple truth, much less sort anything out, most of all its dirty laundry.

          Algorithms Take Control of Wall Street
          by Felix Salmon and Jon Stokes 27, 2010  |12:00 pm  |Wired January 2011  

          Today Wall Street is ruled by thousands of little algorithms, and they've created a new market—volatile, unpredictable, and impossible for humans to comprehend.

          Last spring, Dow Jones launched a new service called Lexicon, which sends real-time financial news to professional investors. This in itself is not surprising.

          The company behind The Wall Street Journal and Dow Jones Newswires made its name by publishing the kind of news that moves the stock market.

          But many of the professional investors subscribing to Lexicon aren’t human—they’re algorithms, the lines of code that govern an increasing amount of global trading activity—and they don’t read news the way humans do. They don’t need their information delivered in the form of a story or even in sentences. They just want data—the hard, actionable information that those words represent.

          Lexicon packages the news in a way that its robo-clients can understand. It scans every Dow Jones story in real time, looking for textual clues that might indicate how investors should feel about a stock.

          It then sends that information in machine-readable form to its algorithmic subscribers, which can parse it further, using the resulting data to inform their own investing decisions.

          Lexicon has helped automate the process of reading the news, drawing insight from it, and using that information to buy or sell a stock. The machines aren’t there just to crunch numbers anymore; they’re now making the decisions.
             

          This kettle of fish combined with the unconscionable bastards we've all come to know and hate have it all under control?

          So here we damned well are, aren't we?

             

        •  too funny (1+ / 0-)
          Recommended by:
          The Nose

          If BoA doesn't want customers, why doesn't it just close their accounts out and send them away.

          When I closed my bank account out, the bank manager wanted to have a chat with me to talk me out of it.

          The cops don't come to arrest anybody unless the bank calls them to.

          The free market has already been a miserable failure which is what caused the problem in the first place.  But you already knew that.

          •  Re (0+ / 0-)
            The free market has already been a miserable failure which is what caused the problem in the first place.  But you already knew that.

            Are you capable of making the simple decision of what bank to use? You use a credit union or something, right? Why? Because you weighed the options and picked the right one for you...?

            If so, do you maybe think everyone else is capable of making the same decision for themselves as well?

            That's the market for banks. Everyone picks their bank based on whatever factors they want, the most popular banks win. It's a good thing.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Mon Nov 21, 2011 at 08:04:35 PM PST

            [ Parent ]

            •  it's not the consumers who are (0+ / 0-)

              fucking up "the free market".  But you already knew that too.

              And I don't blame you for not answering my other points.

            •  What's yer tertiary motivation Sparhawk? (0+ / 0-)

              You say the big banks aren't hurt by the closing of small accounts and they don't care about this. You say you don't care if people come to the rational conclusion that they would be better served by a credit union than a big bank. So why are you expending so much passionate effort here? Is it because you can't bear the the thought that somebody on the Internet is wrong about something?

              Somebody has too much time on his hands.

    •  An avalanche (2+ / 0-)
      Recommended by:
      greengemini, The Nose

      is nothing more than a bunch of snowflakes.

      We already have death panels. They're called insurance companies.

      by aztecraingod on Mon Nov 21, 2011 at 02:36:45 PM PST

      [ Parent ]

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