This morning I got a telephone call from a dear old friend, another one of my college friends who was my intellectual and political brother. We were and remain kindred spirits and knew back in the late 1970's that ultimately this American Experience, this false American Dream which we both threw ourselves into, as hard working small business man, was now headed to a revolution. But that is all backdrop. He called this morning as I was rushing to get dressed to go to work, as a temporary or day professional laborer, (a full time endeavor though with no benefits, it is the state of the underemployment world).
Okay, he wanted ask whether he should take up another offer of buying his account deposit by a Big NYC Bank (Chase) was worth it, worth meaning would it cost them more money and pain. They wanted him to place or re-up a deposit $5000 minimum balance for a checking account and he would receive $450. I simply gave him the math as I knew it. To the bank $5000 means that they can use his money in short term leverage at a multiple of 20 times (minimum) or the account is worth $100,000 in continuing their cash flow of this casino economy. So his $450 was simply a small commission that would have been paid to some bank clerk smuck that is no longer employed at his branch that was bought out back during the first meltdown.
He got it. I closed the conversation by saying put that $5000 in the local Credit Union and it will do what the movie 'Patton' said to General Bradley, that credit union will loan it to small businesses or customers who will make local jobs with it and gain real ground. (A take off Patton demanding more gasoline and killing Germans and gaining ground, where Bradley is said to say there are real politics and Montgomery needs it to take out the V-2 rocket launch sites.)
I further told my friend that any money a big bank uses to buy depositor monies is pennies on their dollar. We should be understanding that CASH is KING and in their world it is CASH FLOW, liquidity and fast liquidity, choke off their cash flow and you do what happens to organized crime when there is a Mob War, their cash flow is cut off. Remember these bankers all make money on transaction commissions, (they call them bonuses) but they live like mobsters, at a lifestyle that demands cash. Cut it off and they are diminished. They can't pay off the politicians or the police and eventually they will topple.
When I was done he was moved, sorry big unnamed bank you lost out on $5000. But that leads to a bigger anecdote. My wife's parents have an old trust fund that dates back to the 1960's when my wife's grandfather was an affluent and respected surgeon. He passed early but left a few million in a living trust to his wife and then children. In the early 90's grandma passed where upon we examined this trust which had not grown in value by 2% over almost 24 years! The then local bank and trust department had used a scheme of transaction fees to raid on the account. We eventually threatened to sue the executioner (bank executive) and trust for a variety of offenses where they settled. Okay more backdrop and full story below the squiggles.
Last month my father in law received his annual statement from another big NYC bank's trust account department of a living trust that my mother-in-law is the beneficiary. There in and among the fancy, slick documentation was a confusing financial statement that he figured had at least two dozen fees or transactions that seemed odd. The trust department which was part of their previously a local bank had been swallowed up by NYC Big Bank back in 2010. Fortunately he had a church friend who happened to be the former attorney of the old bank that was swallowed and they talked before the holidays. His now retired friend in turn had my fatherin-law sit down with his grandson, who is a young 'whipper snapper' attorney and part of the friend's old law firm---specializing in financial and corporate law. The young attorney was able to quickly decipher the statements and said classic 'churning', imprudent management where it is a sophisticated effort to hide it all. They set up a meeting after New Year's in his office and to prepare to meet with the bank.
My father-in-law (like myself) keeps every communication and brought it all to their meeting. One important point was that closing a trust account is not like an ordinary demand deposit account and my father-in-law didn't go into detail but told me that the succeeding costs and timing all goes back to the original agreements when they set up the account. Now when the NYC Bank took over the accounts they just sent a letter stating that all terms and conditions originally agreed upon would carry on through the life of the trust account. The young lawyer said this will be important in that your original terms state that at the beginning of every year if you are not satisfied you can change administrators without costs. Since I don't have a trust account I am told there is usually a term of three or five years or whatever. The young lawyer cautioned that the NYC Bank does not operate that way and will fight you. But he said at the heart of the matter is the question of "prudently managing the trust" especially managing with skill and "caution" and as the young lawyer stated, 20 transactions in a year does not meet the uniform code standard. This he said was leverage---my mother-in-law didn't care about leverage, she wanted the money back!
Last Thursday they had an appointment with an unprepared trust executive where the young lawyer (along with his grandfather, acting as my wife's parent's personal counsel coming as moral support) they are in their 80's to begin the process of removing the trust from said bank to another. As my mother-in-law (she reminds me affectionately as the grandmother character in the original movie "Arthur", esp. when it comes to money) said when the banker walked into the conference room and cheerfully saying the customary "what can we do for you today", and then having my mother-in-law say with all indignant righteousness, "you can start by giving back all the money your bank stole from our account!"
Naturally cooler heads immediately asked her to stop but then the young lawyer said that there are two matters, one the family would like to immediately begin the process of transferring the trust to an new administrator in accordance to the original trust administrator agreement that remains in force, and two, begin the process of negotiating a settlement for what he described as imprudent management of the trust where the bank benefited from generating inappropriate transaction and management fees. My father-in-law said you would have thought he was choking, and his knees buckled.
At that point the banker said he would have get some legal counsel and other persons in the meeting at a later date and have them acquainted with the file bla bla bla. Where again my mother-in-law interrupted; "you sit down we made an appointment with you and told your staff to be fully prepared for an entire review of our trust and you are going to hear me out. This money was once earned, by a doctor who saved peoples lives, who used to go on house calls and perform surgeries in all hours of the night and day as most of the money your bank manages. It is not for you to take whenever you think you want a f#@%!*^ bonus."
She then got up and with her walker indignantly made her way to the door, then said, "these lawyers I have confidence with, you are to deal with them I can't stand breathing the air that you and your staff have possibly contaminated."
As she reached the door she looked at the now standing and dumbstruck banker who failed to open the door in a traditional form of chivalrous manners. Where then my mother-in-law, now of all 91 lbs said with total disrespect, "didn't your mother teach you basic manners, open the door for an old crippled lady." He did so and then turned to my father-in-law and said that they need him to sign some papers if they are going to have their counsel represent them, and then inquired to their introductions.
My father-in-law said, this is so and so from and that is our personal friend and counsel who happens to be the former legal counsel of the bank that you purchased when we originated our trust. My father-in-law said the banker then rolled his eyes and said "great" and went ahead for some papers for them to sign.
Move your money, have your parents and grandparents do the same.