Do banks no longer want our money?

[gcgang]

With today's low/negative interest rates, and lack of loan opportunities, the banks really don't want or need more money.

 

[imoldernu]

For what possible reason would a bank want to accept a savings account?

The banking industry is built on leverage. Understanding how this works explains why your money is unimportant.

from 2013:Everything you ever wanted to know about bank leverage rules

Discussions of bank regulations frequently get bogged down in wonky and quite technical talk. So it seems like a good time to take a step back and discuss what exactly is being proposed, what it means for banks, and how it affects consumers and investors.

Let's start with the basics. What was just proposed?

The three federal bank regulators—the Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp.—issued a joint proposal to require the eight biggest bank holding companies to maintain their leverage ratios to a minimum of 5 percent, while their FDIC-insured bank subsidiaries would have to maintain a minimum 6 percent.

The standard leverage limit for all banks is set at 3 percent.

more...

One of two things could happen when the leverage ratios are exceeded by withdrawals... (1) Part or all of the monies owed by the banks to customers defaults and is lost, or (2) the government bails out the banks by printing money.

Think of it this way... The bank's assets include the $396,000 total that is owed on the house mortgage it is holding on the $230,000 house that was just bought @4%.

A cynic's view...

 

[big-papa]

Was at a bank for years. Bank got bought by BofA and immediately added fees for everything. We dropped them then went to a credit union associated with my wife's place of employment. That was about the time that credit unions wanted to start opening up membership to anybody and the banks were fighting it tooth and nail in congress. They lost. Still at the same credit union and very happy with it. Do 95% of banking online these days.

 

[FANOFJESUS]

I read the big banks did not want to fool with people who had less than 50k

 

[Bamaman]

I remember applying for a loan in just my name at Regions Bank in Atlanta for a new Ford Ranger pickup. The loan manager turned my application down because I had a Lincoln lease for my wife. We had just sold our house, and were in the process of moving to town.

At the time, I had enough in my checking account to pay for the truck. That wasn't good enough for Regions' supremely ignorant loan officer. She still turned me down.

I just ran the deal through my employer--no problem. They financed it for me.

And after all these years, Regions remains a sub-standard regional bank.

 

[bUU]

One of the tasks that I have taken on since that time, is choosing my bank based on what matters to me

And if circumstances in your life had been different, it is possible that BoA may have been that bank. That's something I've taken away from my experiences: Never say never; never make choices to spite myself; don't let principle or expediency dominate, but rather balance the two against each other.

Two times the following conversation happened to me:

It is a shame that doesn't work for IRAs while you're still work.

That's the same strategy cell phone companies and cable tv companies use. The best deals go to new folks.

Precisely, and they know what they're doing. I just switched natural gas marketers. I'll probably have to switch again next year, and then two years from now I'll be back where I started. Each person gets to decide whether saving the $200 or so that the promotional rate gets you is worth playing the game. Most people don't and so they pay more than they need to. They're not wrong for doing so, nor are the companies wrong for setting pricing in a way to maximize shareholder value. We all have different priorities.

I read the big banks did not want to fool with people who had less than 50k

You can read that right off their fee schedule... "Fee waived for customers with combined balances of..."

 

[MichaelB]

I was very upset with Bank of America back in 1968, because I was young, just starting out, nearly broke, and they were eating me alive with fees. Then they charged me a fee to close my account. I told them I would never open another account with them in my life, and I haven't.

One of the tasks that I have taken on since that time, is choosing my bank based on what matters to me (and fees are part of that). My present bank has no fees and is a well established bank.

We also have a couple of banks that behaved poorly, so I said "never again" and took our small chunk of business elsewhere. If they didn't want my business a decade or two ago, I'm doubtful much has changed since then.

Besides, it's not like there's a shortage of banks.

 

[ShokWaveRider]

I still cannot understand why people (especially us retired folk) even consider a bank. Our money is no safer in a mega institution than a local CU. IN FACT, NCUA offers better insurance than the FDIC.

I have "Banked" with a CU for over 30 years and NEVER paid a fee for anything that was not self inflicted. Deposit slips are free, withdrawals are free, now we do not even need checks anymore with Credit Cards and On Line banking. Plus their CD returns are often more attractive too.

 

[Fedup]

BofA has been steering people to use ATM machine vs teller. They do this to me every time. I only use online deposit now. I don't have large cash of anything to deposit.


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[Drake3287]

I have to admit I've heard a million complaints about BofA over the years but I've been a BofA customer since getting a childhood savings account in the early 1960's and I've never once in over 50 years ever had a problem with them. Not only that, I've never paid a cent in any type of service fee.

I'm sure some of it is because of my banking status level but still, nothing but 100% satisfaction. Now I only wish my BofA stock would do something!

 

[aaronc879]

I thank God for credit unions. I left the banks about seven years ago. Only credit unions for me here on out.

Same here. I've used a credit union since I was 18. I've never even seen a deposit slip.

 

[RobbieB]

I've been a Bank of America customer for 38 years. Never paid any fees and they never made an error in my accounts.

So good so far.

 

[Fedup]

I've got you all beat. I've worked for Bank of America when I was a teenager. Of course we made mistakes.


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[jazz4cash]

Lately it seems the banks and credit unions want my debt more than anything else. Last month Navy FCU let me add to my 4% cd with 1 yr left on the term. This month they are offering a credit card balance transfer for 12 months @ 0% w/ no fees. I love this credit union! As much as I think I should hate BofA, I've had almost no problems with them and love their online banking and Billpay. Don't these people know I don't have a job?


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[JOHNNIE36]

I have been with BOA since 1989 when I moved to Florida. Called something else back then which I think was Nations Bank. Have never had any kind of problem in dealing with them. I hate to go into banks. I use the drive up ATM for check deposits but never cash deposits. I use the commercial drive-up window for cash deposits. Yes, you now need a deposit slip (which the teller is more than happy to fill out) and photo ID which is on my BOA bank card which I also need for most deposits. I do all on line banking and hardly ever write a check. Just the other day I was in a grocery store and lady in front of me wrote a check for her purchases. Also had to enter the details in her check register. Like something from 25 years ago. The times, they are a changing!