Going to the bank used to be sort of fun. Lollipops for the little ones. The local manager you had known for years. Depositing your paycheck with the same tellers every Friday afternoon. Such patterns provided a rhythm to daily life and also helped to create a sense of virtuous wealth-building.
How different it is today. When we think of "bankers" now, we are more likely to think of bean-counting downsizers, who don't know us and never will, receiving gargantuan bonuses each year. Or perhaps beggars in pinstriped suits, going to Washington to seek billions of tax dollars for bailouts.
And what tender concerns for their customers. While Bank of America's website boasts of continuing "to support the U.S. economic recovery," America's second largest bank also concocted a new nickel-and-dime racket in which debit card users would pay a $5 monthly fee. Although B of A backed down Tuesday after a storm of protest, Bankrate.com reported in a recent study that assorted consumer banking charges today are at record levels.
Which brings us to Saturday, which is being called "Bank Transfer Day." This quickly organized event, a spinoff of the Occupy Wall Street movement, is encouraging a different kind of bank bailout. Instead of propping up banks with government loans and more fees for less service, the idea behind Bank Transfer Day is that we the people should simply take our money out of these places and put it somewhere else.
Why pick on banks? Let's start with the fact that many economists believe their casino-like gaming of the U.S. economy helped to cause the Great Recession, with its now countless foreclosures, business failures and job losses. And let's continue by remembering that these megabanks have grown handsomely in recent years, despite their failures. Overall, America's banking and finance sector has roughly doubled its share of total U.S. corporate profits — from 13 percent in 1980 to 24 percent today — with few if any commensurate economic benefits for the struggling American middle class.
As ATMs replaced RLTs (real life tellers), and then banking took to the Internet, it all became far more impersonal. The sense of having "my bank" started to vanish with the wave of mergers beginning in the 1980s, along with the corporate re-christenings that yielded oddly named institutions with no sense of place, history, or even specific function. Banks used to be safe, local places to park money for a modest return. Today the big banks pay pennies in interest to the average saver while charging $4 out-of-network ATM fees, $31 bounced check fees, and (no-longer-free) checking fees averaging $50 a year.
These are only some of the reasons why it might make sense for you to take your money and run — directly to the nearest credit union.
Credit unions are nonprofit, member-owned organizations. There are a number of them in the Baltimore area. They exist to promote thrift and to meet the needs of the average saver. Through credit unions, members pool their savings to generate higher interest payments and to provide low-cost loans to members.
Members (the savings and checking account holders) elect their directors and can hold them accountable. As a result, they are often rewarded with better, more personal service. Many of the big banks can hardly be bothered to pay any real attention to the average or small saver. Credit unions exist for these very people.
Credit unions did not partake of the "something for nothing" practices that helped to sink the economy in 2008, and their record of success and service in recent years has been exemplary, despite (or is it because of?) the fact they don't receive federal bailouts.
Credit unions began in the United States in the early 20th century, thanks mainly to the tireless work of Edward Filene, the department store magnate and social reformer, and Roy Bergengren, a great and largely unsung American hero who devoted his life to helping working Americans join the middle class and build better lives for themselves through credit unions.
Today, about 90 million Americans are members of credit unions. They are strong, safe and federally insured. But total credit union deposits today are still dwarfed by the big commercial banks, whose total assets are now about $12.5 trillion — just a tad less than the nation's entire gross domestic product.
Taking these unresponsive giants down a peg or two for their sins, and instead putting our money in more community-based institutions that actually care about us and want to meet our needs, may be just what the doctor ordered. It could improve our own financial well-being, inject some real competition into financial services, and help rebuild the nation's economy on sounder, thriftier foundations.
Andrew L. Yarrow, a senior fellow at the Institute for American Values, is the author of "Measuring America: How Economic Growth Came to Define American Greatness in the Late 20th Century" and is working on a book on the history of the early 20th century thrift movement. His email is andrewyarrowcolumns@gmail.