How banks lose our confidence

I’ve long preferred using local banks and credit unions over large mega-banks.  I selected the local bank I use for most of my business and family banking based on its location, knowing full well that its online presence was poor.  Being able to go into the branch and speak with a person who can make decisions was more important to me.

But just because a bank is local doesn’t really make it better.  Sometimes I feel that local banks try to get away with stuff just because people prefer the local banking experience these days.

Case in point:  I deposited some cash in my account, using the branch’s ATM, near the end of the day.  I understand that those deposits aren’t counted and credited the same day, but timing was not absolutely critical.  After making the deposit, I went home and arranged to transfer that cash to an online account I keep.

Puzzling as it is to me, transfers between banks take some time, even in the age of electronics.  But my online bank sent me an email reply, telling me that the transfer would be completed in two days, which is plenty of time for the cash deposit to hit.  After all, cash doesn’t have to “clear,” because you know it’s good.

So imagine my surprise when my local bank hit me with a thirty-dollar fee.  From what I understand, the transfer request hit before the cash was counted and posted to my account.

My local bank has aggressively tried to get me to opt-in to overdraft protection by playing on my fear that I will be embarrassed at the check-out counter if my debit card is declined, but I said no thanks.  The reason I use a debit card is to ensure that I don’t spend more money than I have, and my local bank wanted to take away that protection, and replace with with more thirty-dollar fees.  So I confirmed that they didn’t try to overdraw my account.

Well what happened?  Apparently they charged me a fee because they didn’t execute the transfer.  I got charged thirty dollars because a computer program didn’t run.  And it didn’t run because cash, apparently, does take a long time to clear.

So I’m losing confidence in my local bank.  Once upon a time, banks made their money very transparently:  they paid people interest on the money they saved, and charged people more interest on the money they borrowed.  I don’t see why we can’t get back to that.  If the services we demand cost a lot, then we get a smaller return on our savings, or pay more interest on our loans.  The only reason to tack on fees (pages and pages of fees) is in the interest of opaque business practices.

Allegedly someone from my bank is supposed to call me about this.  Maybe they will reverse the fee, but I would feel better if they reversed the policy of tricking their customers instead of just making it easy to see what banking costs.  I don’t have a problem with banks making money for their services, but I do have a problem with a fee structure which takes advantage of those customers.

Depending on how that conversation goes, I may or may not edit this post to mention my local bank by name.

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