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Banks Ain't What They Used to Be
Old 02-06-2008, 10:59 AM   #1
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Banks Ain't What They Used to Be

Hanging out at the bank today waiting to get a safe deposit box, I was reading a lot of the promotional literature there. It looked like it actually cost a few books to open up a savings account! I can remember years ago when savings accounts, even Christmas clubs, were free! And when banks would give gifts for opening up a checking/savings acount. I don't think my parents ever bought a toaster---they got it directly from the bank or through green stamps that the bank gave to redeem.

I know I'm dating myself and things have changed---but I as wondering why. Does it really cost banks that much more now to do business?
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Old 02-06-2008, 11:18 AM   #2
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I'm not sure if you have your accounts at a large national bank or a small community bank but larger banks have alot of overhead that smaller community banks don't have. There are more branches to pay for and larger ATM and online networks to maintain. Another reason is that banks are taking larger losses due to identity theft and fradulent debit and credit card transactions. Not to mention higher default rates on credit cards. Of course they're not going to eat those fees, they're passed along to the consumer.

So, yes, it does cost banks more to do business now than it did even 20 years ago when there was no online banking, no ATM's, no identity theft, fewer branches and very few credit cards to take losses on.
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Old 02-06-2008, 12:54 PM   #3
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I know I'm dating myself and things have changed---but I as wondering why. Does it really cost banks that much more now to do business?
For-profit banks think that non-profit credit unions are the worst evil invention ever to be seen in a capitalistic society.

But I wonder who has more deposits...
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Old 02-06-2008, 01:06 PM   #4
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For-profit banks think that non-profit credit unions are the worst evil invention ever to be seen in a capitalistic society.

But I wonder who has more deposits...
The entirety of the credit union industry balance sheet is rounding error to US banks.
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Old 02-06-2008, 01:07 PM   #5
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I'm not sure, but what I do know is that it is possible for me to do all the banking I need to do at virtually zero cost.

I have two checking accounts, three savings accounts, three retirement accounts, nine college accounts, a mortgage, a student loan, and about 25 or 30 credit cards. I have electronic access to all of those accounts, online bill pay, checks, ATMs, debit cards, etc. I pay interest on the mortgage and student loan, of course, but not much beyond that. According to Quicken in the last six months I have spent a total of about $12 in bank charges across all of those accounts. Most of that money is interest payments when I overdraft my checking account when my large transfers in and out miss by a day or two. I've made much more than that $12 back in bank interest, account opening bonuses, and so forth.

I doubt I am unusual on these boards, but whenever I see people paying for banking services I just don't get it, since it seems easy to get those services for free.

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Old 02-06-2008, 01:44 PM   #6
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The entirety of the credit union industry balance sheet is rounding error to US banks.
Amazing-- I wonder why the banks bother lobbying so aggressively against legislation perpetuating the CU industry.
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Old 02-06-2008, 01:58 PM   #7
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Amazing-- I wonder why the banks bother lobbying so aggressively against legislation perpetuating the CU industry.
Like you said: because they are EVIL!

I think the banks most threatened by the CUs are the community banks who look a lot like credit unions to begin with. The megabanks don't really care either way what the peasants of their industry choose to squabble over.
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Old 02-06-2008, 04:40 PM   #8
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When I was a lad ('60s) the banks used to be open 'til 3 pm.

Mike D.
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Old 02-06-2008, 04:54 PM   #9
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Hmm, lets see...Wells Fargo and Bank of America, the two local humongobanks...both have huge and very attractively appointed buildings in the main city near me. One of my credit unions has no building downtown, just the branches. I'm betting the Penfed building, wherever it is, is pretty mundane and grim looking.

You do the math.

Funny thing though, my dad wont put his money in a credit union, even though wells fargo hits him up monthly for various vague and often incorrect fees. When I suggest he try something like penfed, he looks like I just suggested he put his money in a paper bag and bury it in the yard.
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Old 02-06-2008, 08:00 PM   #10
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I'm betting the Penfed building, wherever it is, is pretty mundane and grim looking.
Wouldn't know. I've been a customer for two years and never set foot in the nearest branch, let alone been on the base where it's located. Of course I've been giving them money for months but I've never tried to get any of it back.

As mentioned in another thread, I'm hoping to achieve the same distinction with Navy Federal as soon as I can deposit checks from my scanner.
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Old 02-06-2008, 09:16 PM   #11
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I've been giving them money for months but I've never tried to get any of it back.
Me neither.

Hmm, we're pumping money into the Pentagon credit union, and the government is about to give us all tax rebates and ... and...

Ruh roh...
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Old 02-06-2008, 10:16 PM   #12
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Hmm, we're pumping money into the Pentagon credit union, and the government is about to give us all tax rebates and ... and...
Can I save money on the actual thank you card and just maybe send an e-card or something instead?
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Old 02-06-2008, 10:31 PM   #13
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I'm not sure if you have your accounts at a large national bank or a small community bank but larger banks have alot of overhead that smaller community banks don't have. There are more branches to pay for and larger ATM and online networks to maintain. Another reason is that banks are taking larger losses due to identity theft and fradulent debit and credit card transactions. Not to mention higher default rates on credit cards. Of course they're not going to eat those fees, they're passed along to the consumer.

So, yes, it does cost banks more to do business now than it did even 20 years ago when there was no online banking, no ATM's, no identity theft, fewer branches and very few credit cards to take losses on.
That almost sounds like the large national banks could shrink and attract fewer customers to cut down on overhead. I wish they could find a way to not transfer the identity theft expenses to the honest customers, but as with everything else, in the end, the customer ALWAYS pays.
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Old 02-06-2008, 10:36 PM   #14
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The biggest money maker for the mega banks is not the fees (even though that is in the many billions), but the float on the deposits...

My 'high' interest checking account at mega pays a WHOPPING .15%... it was way up there at .20% until the fed cut the rate down so I don't get as much now...

When you think that I probably have an average balance of.... say $5,000, then it is costing me about $200 or so to have a checking account.. even though I don't 'pay'...

Nobody should pay 'fees' unless they can not handle money at all... to many free checking accounts out there...
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