Nickeled and Dimed By Both Wall Street and Main Street

bank_feeNew Orleans   In the wake of the Great Recession and general financial meltdown we all like to think we’ve got our eyes peeled to all of the slick shenanigans devised by Wall Street wheeler-dealers.  With billion dollar bank settlements still regularly reported in the daily papers and with a new governmental body, the Consumer Financial Protection Bureau, in place that has our backs, we can finally relax.  Not!  I’m increasingly convinced that it’s not the big heist that will get most of us, but the fact that we’re now nickeled and dimed every day and in almost unimaginable ways once we relax even the tightest grip from our hard earned money.   The answer in banking to new regulations and restraints and lower interest rates seems to be rather than the big score, just to suck us dry, bit by bit, day by day.

When we worry about the unbanked, we keep looking for ways to achieve citizen wealth or income security with more safety and less cost.  Generally, most of us would believe that it’s better to put your money in a bank than to wad it up and hide it under your mattress or in a crack in the wall.  I’m just not sure that’s true anymore.

Minimum service fees are so expensive that their main purpose seems to be to suck the money out of your accounts in exchange for nothing.  In the wave of support for credit unions a couple of years ago, some of us opened accounts in the local credit union in our neighborhood, called ASI, because they seemed committed to the area.  The whole point of a credit union used to be savings.  You put some money in, and they get to invest it, but you were able to build a relationship for the future.  Boy, is that old school, gramps!  Once you discover there are minimum balance fees ever month and quarter, a couple of hundred necessary to open the account, becomes not an inducement to savings and security, but a bank donation, because when you’re not watching, it’s gone in a couple of years.

And, not just credit union accounts either.   For years Local 100 had a petty cash account with JP Morgan Chase in Little Rock.  We had forgotten we had it, until a visit to the office several years ago stumbled on a statement.  They were sucking out $20 or more a month to maintain an account with hardly $300 bucks in it.  Over a two year period we wrote, called, and cajoled Chase to close the account and transfer the money out to Capital One where we had our main account.  They delayed.  They promised.  They assured us.  We never saw a dime before it was gone.  For a couple of hundred here or there, the small fry and the big boys know you won’t sue, so they make what’s called a “business decision” to simply steal your money figuring they can get away with it.

It’s not just bank accounts either.  They treat anyone small, even their shareholders the same way.  This week I got a weird letter from Citi, as in Citibank, Citicorp, etc.  They wanted to know how I was going to pay $45 bucks and change for some kind of investment account they had me in.  It’s a long boring story, but 30 odd years ago on an office bet among other things I bought 10 shares of Citi for less than $100 with no brokerage fee.  It goes up and down as they get caught doing good or evil, and now it’s worth $700 or so, many decades later.   This is not Warren Buffet look out time, if you know what I mean, but what was a $45 annual charge all about?  They had an 800 number for questions, so I called.  What a hustle!  So, it seems after having signed us little fish up on one of their accounts, she told me they had started attaching a fee a year or two ago, unbeknownst to me.  So, I said, take me out of this now.  Not so easy, cowboy, she said.  I would still have to pay $45 for last year and $45 for this year out of my small holdings.  Well, all you’re doing is holding my certificates.  Send them to me, I’ll hold them myself.  Oh, no, dude, she claimed they would cost something on the order of $500 apiece, which surely is a big fib!  She claimed they could transfer my shares electronically to a depository of some kind, but that would also cost about one-hundred-and-a-half and when I asked what that outfit would charge annually, she would neither give me the name nor the cost for 5 minutes or more.  Oh, and to transfer out, I would have to sign a form and get it notarized by my bank, which she would supposedly mail to me.  Come on, man!  My Citi shares are hardly worth anything with miniscule dividends, but as a small fish to a Wall Street shark the message was clear, I was either going to have to agree to let them blood suck me for fifty or more every year or they were going to try and take a third or more of the little I had with Citi so that they could bleed me out now.

Modern finance, whether Wall Street or Main Street, is about billions and billions of dollars in transaction costs ripped from the hands of all of us small fry, not shrewd deals gaining value and building the nation’s economy.   We’re the grease on their wheels.  While the government and others try to watch them at the front door, they are stealing us blind and with impunity out of the backdoor in every nook, cranny, and alleyway they can find.

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