Cosmic Reflections

Since 1987……   That was the date on the Wells Fargo debit card I just shredded.
Yes, I just closed the account and moved the money from this financial giant occupying Wall Street to a local credit union back home. Thanks to the ongoing Occupy Wall Street protest, over a year of studying everything I could find by David Korten and similar voices (who document how Wall Street is broken), and 50 years of personal observations of the changing financial sector from local banking in the 50s to today’s Wall Street greed and corruption, I finally realized it was time to exercise the little power I had. It was time to stop playing in their sandbox, to stop complaining about Wall Street, and transfer my meager account back to local banks who still are connected to Main Street.

That checking account had been with me for nearly 25 years, through thick and thin, through joy and sorrow.

It was born by filling out an application in ‘87 at our small local bank called the Bank of Southglenn and was used with mutual gain for many years. But the bank was bought out by a larger bank and renamed United Bank of Southglenn. This was before ATMs and automatic payroll deposit so back then we actually went inside the bank on Friday afternoon and deposited our paychecks and withdrew cash in a transaction with a real person. As a result, we got to know the tellers and bankers. Back then when one needed a small loan to buy a new car, your banker already knew you and had your basic credit information available and would give you an affordable interest rate – especially considering you received an annual interest rate of several percent on the money you deposited with them in a savings account.

After this initial buyout by the bigger bank, there was a noticeable change in personnel, but that’s progress. And the new bank provided the first two boxes of checks with their new name for free. How good was that? Apparently the Colorado legislation passed a new law allowing “Branch Banking” in the State. Branch banking sounded good at that time. You could be in a different part of the city or state and still find a “Branch” to provide some banking services. How convenient.

After a few more years went by, a third name showed up on the outside of the bank building with a new logo. Of course, again there was no charge for re-printing all our checks to read simply, United Bank. Again there was another personnel change and fewer tellers, although the basic account number initially assigned by the Bank of Southglenn still had not changed. How good is that? Of course the name change was accompanied by a few new services now offered by the latest incarnation in the banking system – including automatic payroll check deposits, and an automated teller machine – soon to be known only as ATMs.

What convenience. Now I rarely went inside the bank just to stand in line for one of the two overworked, underpaid tellers still left on their payroll. We were told there was no fee for this latest invention, the ATM, because the cost of the machines was actually offset by the reduction in cost of the people-tellers each branch had to employ. Sounded OK, but there was this haunting feeling that we no longer knew anyone who worked at the bank, nor did any of them know us. The relationship was changing.  Something new was emerging.   Too soon to tell what.   So when it came time to look for an auto loan, it was like being a stranger walking in off the street as far as the bank was concerned.

After a few more years of this increasingly disconnected relationship there also seemed to be ever increasing corporate greed, bad loans, excess profit, overpaid CEOs, a lack of old fashion fiduciary responsibility, and minor changes in services designed solely to increase profit started creeping in our banking system. For example subtle changes such as: a “minimum” balance to retain your free checking privilege, a small charge if you used an ATM other than one at your local branch, an increase in the cost of a box of checks, a significant decline in the interest rate paid on your savings account, a $39 late fee on your charge card account even if the balance owed was $11.52, notices in fine print that the APR for cash advances on your account would now be 24.9%, and that the bank had the right to increase the APR on new purchases up to 30% in certain circumstances. You understand – you’ve been there.

Then the predictable notice in the mail, “We are changing our name, and our banking services will be even better.” Of course a new box of checks with the new bank name (now Wells Fargo) would be issued at no charge – as long as you contacted the bank and confirmed your account information ….. But now progress had given us “on-line banking” – meaning the computer would email a “green” electronic statement each month instead of mailing out a paper statement. All good things. More progress. But the external wrapping of progress was barely covering up the underlying greed, usury, and disassociation of the corporate giants from the people they were originally serving – but now exploiting.

And then the internal terrorists who had rebuilt the Street on sand (and corruption) caused its inevitable collapse in 2008 – a collapse that injured hundreds of millions of innocent (albeit naive) people in the U.S. (as well as others around the world). To rebuild, our government representatives directed Main Street taxpayers to finance a bailout and remake the Street in the same dysfunctional image. Upper management on the Street unabashedly continued receiving their annual multi-million dollar bonuses uninterrupted as a reward for driving their institutions into the ground – because they had quickly and cleverly hired lobbyists to write bailout legislation for congress – because they had helped create and write the ominous story of fear and “too big to fail.” Merry Christmas, to all on the Street.

Meanwhile, we on Main Street continue to struggle.

The phrase, “Death by a thousand small cuts” comes to mind. Creeping Normalcy.  

For the past several years, even though I maintained a balance of $1000 in the Wells Fargo checking account, (and I’m sure because I have been such a good long-term 20 plus year customer with the bank[joke]), Wells Fargo only charged me $3.50 Monthly Check Return / Image Statement Fee and only a $5.00 Monthly Service Fee.  So at the end of each month with this new normal, $8.50 went from my account to theirs (a 10% earnings for them) while they invested/loaned out my $1000 during that time and earned say an additional 5-10%. A total of 15-20% return on money that was not even theirs; not bad “leverage.” They of course irresponsibly “invested” my cash (and yours) – for example, to pay premium prices on bundles of subprime mortgages with adjustable rates that someone knew could never be repaid – particularly in a deflated real estate market where mortgages less than 5 years old were “going down faster than a cheap aluminum lawn chair” – most are now totally underwater. But the bundles were rated AAA by other sister organizations on the Street so the person called Wells Fargo was no longer culpable – and CEOs are able to retain deniability in a court of law. How great is this country of the brave and the free – filled with the gullible like me!

The good news. There still are a few local banks, and credit unions, and state banks that are not directly tied into Wall Street. Local bankers and financial managers are generally honest, well meaning people – and we maintain a personal relationship with them.

We can wait for politicians to fix things on Wall Street – when hell freezes over – or we can use the little power we still have – the power to choose where we put our money. This first step was easy. The next step to move retirement savings (e.g. IRAs, 401Ks, etc.,), life insurance, annuities, etc. out of Wall Street and back to Main Street where we have good relationships is going to take a bit more effort, but considering how the amount in those Wall Street accounts keeps getting smaller, it is getting easier. Placing it under the mattress is beginning to look better and better.

Since 1987….

I apparently fell asleep. I wasn’t paying attention to the creeping corruption in the financial sector. Occupy Wall Street is my alarm clock suggesting that I wake up.

I think I need another cup of coffee.