By Bob Dorn
So, this 71-year-old with the income of a teenager walks into an uptown branch of Union Bank. He had just $28.75 in his checking account following his open heart surgery two weeks before on Nov. 17.
This was his first chance to get to the bank to take up some issues.One reason he had so little money had nothing to do with the bank’s operations. He’d had an angiogram and an EKG earlier in the month – stuff the medical world must do before doctors can open everything up to repair floppy heart valves – and the upfront co-pays were about $160 more than he’d anticipated. Those and smaller amounts for medicine accounted for the couple of hundred he hadn’t factored into demands on the checking account.
Still, he had his “overdraft protection savings account” with a balance of $600 available to cover any shortfall in his checking account. So he wasn’t worried when his wife took him to the hospital for the surgery Nov. 17. The money would be automatically transferred from the savings account to the checking to cover the unanticipated advance medical fees.
But.. he had still fewer dollars in the accounts than he’d expected to have. A couple of days later, the checking account statement for the month arrived, and he saw some ATM withdrawals, one for $100, that he hadn’t made a note of. What he’d used the money for he couldn’t remember, maybe gasoline? Food?
But… now his balance was still lower by… well… $20. When you have just $28.75 in your two accounts near the end of a month, and just before the pension and social security checks arrive, $20 means something to you. And then he saw where the $20 had gone. It had gone to two $10 “overdraft transfer fees” the bank charged for the service of moving money from one account to another.
Now he had some issues he could take up with the bank.
In all the time – some 18 months – he’d maintained the savings account that prevented him from overdrafting he’d never overdrafted. So he couldn’t know that the bank charges $10 every time it covers overdrafts from savings accounts. Well, he could have known if he’d read the small print on the tri-folded 4-color pamphlet, and the 8 and1/2 x 11” application form he’d signed opening that savings account.
He thought there’d be no surprises after he made a point of asking tellers on two separate occasions if the transfers were made automatically; he didn’t want to find out later that there was some trigger to pull when funds in the checking got too low. He figured that there’d be no problem. Yes, they’d said, the transfers from savings would be made automatically to prevent the overdrafts.
What was pissing him off was he didn’t remember any human being telling him that there would be a $10 fee for each transfer. On top of that the bank had the huevos to name this overdraft protection a savings account. Over the year and a half he’d held it the overdraft account had paid him interest of just $1.61, and it now contained 18.39 fewer dollars than he’d deposited into it over that time.
Another issue that pissed him off was that the modest five-figure money market account he held as disaster money was paying just .80 percent interest. Of course, it’s national; CD and Money Market rates are combinations of Freddie Mac, Federal Reserve, international banking and the costs of selling arms and drugs. That what determines the cost of lending and borrowing. My bank can’t do anything about all that, right?
So, once the 71-year-old with a new heart valve gets to the bank he tells the kid teller (it’s certainly not his fault) that he wants the two $10 fees reversed because he’d like to have the cash to carry around with him while he awaits the arrival of his retirement checks. The kid goes to the branch manager and comes back to tell me he can reverse one of the charges but that policy won’t allow him to credit me back the second $10 overdraft protection fee. I guess that sort of forgiveness would only encourage the knowing misuse of the overdraft protection service.
“Let me talk to the manager,” I manage to say, wanting instead to spit on the bulletproof windows.
He’s a mean, prissy white shirt with a muscular sort of face that issues smiles that are more like grimaces. I tell him all the foregoing, and add questions about why the bank isn’t more concerned it keep itself straight with smaller depositors.
I tell him what I think of a bank I’ve been using for, now, some 30 years, that pays $1.61 in interest on deposits into what it calls a savings account over a period of 18 months. And that it does this to a customer whose five-figure money market account has provided the bank capital to invest in fracking and gun selling and god knows what else… and that it won’t reverse the $10 fees because, he actually said…
“…If you hadn’t had that (overdraft protection) account we could have charged you $33 each time you overdrew.”
I said, “Yeah, and if I were to cross the street in the middle of the block out front, there’s a chance I’d get hit by a car.”
And he said, “Exactly, it’s the same thing,” with that tight little smile-grimace (I remember that same grin crossing the face of Mitt Romney when he assured a demonstrator that “corporations are people, too, pal”).
And I said, not missing a beat, “No they’re not the same thing. One’s called an accident and the other is called banking.”
I left, figuring I might try the credit unions and look for higher CD rates at the national investment banks. I found a CD rate of 2.40% but it was for deposits of $250,000, which is 10 times the amount I have on hand to can put into a CD.
So the fact is, banks are really super symbolic of what’s going on in this country. Smaller wage earners pay higher percentages of their paychecks to income taxes than do the super-rich. Those lucky enough to have some $15,000 to put in a CD can’t even get half the percentage rates the super-rich enjoy.
It’s an old story. The rich are getting richer and the poor are getting poorer, and the people working for the rich have been turned into proxies whose business is screwing their own neighbors.
Of course, it can’t go on much longer like this. After a while, there won’t be enough people with meager incomes upon whom the super-rich and their representatives can prey. The super-rich will have all the money. At that point, money won’t mean anything because no one will go to work for it. After all, it only disappears down holes like those “overdraft protection savings accounts.”
Oh, and one other lesson from my recent day. Don’t forget to get your bank parking ticket validated at the teller window, else you’ll be paying $2 for the privilege of losing that money you thought you could get back.