Tuesday, August 11, 2009

Maybe this will be the one about the banks......

If you don't know by now that I'm an old guy, then surely you haven't been paying attention.

In the days of my youth, there was no minimum wage, and kids were allowed to work. My first paying job was caddying for one of my dad's co-workers, and later, I would caddy as a free agent on weekends and during the summer.

My first payroll job was stockman in a variety store for 40¢/hr. I was an industrious young worker, and it did not take me long to amass a fortune of $100, which I put in the bank. My dad went with me to open the account. The account was actually a savings account, which paid about 3% interest, which was prevalent at that time.

The teller said that they were somewhat flexible, and if it happened that I needed some of the money, I could write a check on the account. That was in 1953, I think, and of course the First National Bank in our town was a local bank, and they knew me.

Later, when I was a grown up man with family responsibilities, I had moved to a town near Houston where there were two major banks, both local. As a matter of fact, until the '80s, branch banks were illegal in Texas. Each bank stood alone.

The bank where I kept both a checking account and a savings account charged a fee for checking accounts, something like a dollar a month, but paid interest with no fee for savings accounts.

The other bank in town did not charge a fee for checking accounts. The president of that bank was quoted by one of my co-workers as having said, "If I couldn't run a bank without having to charge my customers to keep their money in my bank, I'd find another line of work".

I left that town for New Mexico, which allowed branch banks, but they were still, for the most part, local banks. None of them was "too big to fail". Savings accounts still paid 3%, and, of course I had one, although I never made much money on savings accounts. If I needed a loan, I would talk to a vice president, and he knew me by sight, and he knew where I was employed.

Years later, but still before those fateful '80s (when Federal regulations were virtually abolished, and Texas laws were changed), I moved to this town where I now live. The First National Bank was a local bank, and I had my favorite loan officer. He'd reach for his checkbook whenever he saw me, but he'd always show an interest in what I was doing, and how things were going in my life, so after a little chit-chat, he'd give my loan.

One Christmas season, somehow things got out of hand, and I managed to get seriously (for me) overdrawn. I had made a lethal error in keeping my checkbook balance, so I went to the loan officer in a panic, throwing myself on his mercy, and asking him for advice. "Don't worry about it", he said, "we know you'll be getting some money soon, and you can catch up then". This was about the time when one of the tellers phoned me and very apologetically explained that they were going to have to start charging $1.50 for overdrawn checks.

Those were the days when one could pick up a check from the counter at most stores, and write that check for your purchase. Checks were processed by people who as often as not knew you, not machines, which most certainly didn't know you.

Physically, the bank I use is the same piece of real estate, although it has gone through, I think four changes in name and ownership. It is now a small branch in a very large banking empire (I was so tempted to say "evil empire", but decided not to).

My oldest granddaughter was born in 1987, and when she was about six, we helped her start a little savings account with her Christmas and birthday money. By then, they had started charging a fee for maintaining savings accounts. The poor kid did not keep that account more than a few years, because there was so little activity, and the interest rate was so low that combined with the service charge, the account would eventually cancel itself out.

A couple of days ago, I was watching on TV a feature on "community banks", which apparently still exist, but the thing that caught my attention was a comment that nowadays, apparently, small loans are handle through credit cards. This made me wonder if perhaps these loans were made through a third party (ie a credit card company) with a corresponding interest rate! My gosh, what are we coming to!

I understand that nowadays, the banks are cleaning up on overdraft charges. That $1.50 of the '70s has blossomed into $30 or more for each overdraft, and the desperate times are apparently leading to an increase in overdrafts, whether accidental or just "hopefully anticipatory".

I'm sure you all know what happens if your payment arrives late (or if it's posted late) by even one day at the credit card company. You're in deeeep trouble!

I have come to the conclusion over the last few years that things have really changed in my long lifetime. Customers are no longer the sought-after patrons of any business, whether it be a bank or a big box store. Customers are now chickens to be plucked.

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