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The Unfriendly Bank

Remember the good old days when your bank paid you money for the privilege of holding your money?  They took the money you deposited with them, and provided credit to other customers in the form of business loans, mortgages, auto loans, and the like.  Upon repayment by those customers of the money they borrowed, the bank provided you, the depositor, a modest interest payment, because, after all, it was your money they used in for those loans.  

Today, for the privilege of using your money to make money, the bank now charges you a fee for keeping your money for you.  People can be forgiven if they’ve come to see their bank as something like a cartoonish character holding you upside down to catch the change that falls out of your pockets.  

Many banks, especially large cap banks such as Chase or Well Fargo appear to treat ethical failures as minor setbacks, a cost of doing business that is glossed over and minimized. It should be no surprise the average retail consumer of bank services feels he or she is not treated well or respected by the institutions that receive and use their money. 

At one time the average bank had few, if any, fees. Now the bank is required by law to list all the fees they charge, and the list is over half a page. I recently asked an acquaintance of mine, a man a good deal younger than I, what he remember about his first experience with a bank. He said he was fifteen when he opened his first bank account, and that he opened both a checking and savings account. 

He remembered that he received a folding camp-style folding chair, a complimentary coffee cup, and he could not recall what the third item was.  He recalled that they made it clear he had to maintain a minimum balance, or he would be charge a fee. They did not tell him about other fees that he only learned about later.

What does this have to do with ethics? Many banking practices are the result of law and regulation. What is disclosed and not disclosed is defined by these outside agents, and the simple truth is that what is lawful is not necessarily ethical.

Transparency should not be legislated. It should be a natural by-product of an honest commercial relationship. This forced transparency is at the heart of much of the disquiet many have when they engage in transactions with their bank of choice. For many, the bank they ultimately choose, is one where they feel least put upon, and the situation is not likely to get better anytime soon.

The environment created by this latest pandemic will drive banking to become even more impersonal with less human to human contact. It will hasten the transition to a mostly mechanical/electronic environment, and it will have a negative impact on transparency.

It is unarguable that banks tread close to what is ethical and what is not, and all of us who rely on our bank of choice need to become more vigilant about how our bank’s practices impact our ability to see what they are doing with our money.