Sunday, November 09, 2008

Why people hate banks

I had a problem with Bank of America a year or so ago. They wouldn't release funds for 2 weeks after I deposited a cashiers check. I realize there were scams going around and they were trying to avoid getting scammed, BUT, even after they were able to confirm they had received the funds from the other bank, they still would not release my money. Not until the 15 days was up.

After that incident I closed all of my accounts with Bank of America. I had been a customer for more than 20 years.

Little wonder people have moved away from banks to payday loans. The New York Times has an article in their Sunday Magazine regarding check cashers. This quote is a good example of why people won't use banks.

Two years ago, Enriquez opened his first bank account. “I said I wanted to start a savings account,” he said. He thought the account was free, until he got his first statement. “They were charging me for checks!” he said, still upset about it. “I didn’t want checks. They’re always charging you fees. For a while, I didn’t use the bank at all, they charged like $100 in fees.” Even studying his monthly statements, he couldn’t always figure out why they charged what they charged. Nix is almost certainly more expensive, but it’s also more predictable and transparent, and that was a big deal to Enriquez.

Marlo Lopez had no broad gripe with banks, but his experience was similar. He moved to the United States from Peru a couple of years ago (with a visa) and got a job as a mechanic at a food-processing plant. Lopez opened his first bank account last summer. A couple of months later, out for dinner, he overdrew his account by 18 cents and got hit with a $35 penalty. It was his fault, he said; he thought he had more in the account than he did. Still, losing that money all at once unsettled him. He kept the account but returned to cashing his checks at Nix.

In these hard economic times I think the cash checkers will do really well. You don't see them going to the government for hand outs.

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